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Products September 20, 2004
DB Absolute Return Strategies to Release Fund of Hedge Funds
September 20, 2004 (PLANSPONSOR.com) - DB Absolute
Return Strategies (DB ARS) is announcing the creation of a
new fund of hedge funds that is aimed at pension plans
concerned with transparency and Employee Retirement Income
Security Act (ERISA) guidelines.
Reported by Kip McDaniel
The fund – The Topiary Fund for Benefit Plan Investors (BPI) – is designed primarily for investment by eligible tax-exempt and tax-deferred investors subject to ERISA guidelines, the company said in a news release. The fund of hedge funds will seek to invest in risk-adjusted long-term capital appreciation through investment in 50 to 100 hedge funds with diversified strategies.
“DB ARS believes that eligible investors should consider hedge funds as an important component of their overall asset allocation. By offering Topiary BPI, we are providing benefit plan investors with a fund that gives them more capacity and more flexibility to invest with some of the top hedge fund managers in the industry,” Josh Weinreich, Head of DB ARS commented in the news release.
The fund is structured to meet the challenges faced by ERISA plan investors seeking hedge fund involvement, the press release said. Many hedge funds limit pension involvement to fewer than 25% to avoid ERISA guidelines.
“This ‘plan asset’ limitation has made it difficult for large investors to place ERISA assets with many funds of hedge funds,” asserted Stephen Burke, Head of Institutional Sales and Marketing for Deutsche Asset Management. “We are pleased to now be able to provide our institutional clients with access to some of the top hedge fund managers in a fund that does not place a percentage limitation on the ERISA assets that it can receive. And there is no ERISA impact on the underlying hedge funds. This can be a big advantage for our clients.”