Alternatives Solutions for Canadian Investors

Date: Monday, July 28, 2008
Author: Maggie Shea, Financial Correspondent,

TORONTO (—Canadian money manager Sceptre Investment Counsel Ltd. and alternative asset specialist Fairfield Greenwich Group launched a joint venture to provide alternative investments to Canadian institutional and high-net-worth investors. Through the arrangement, Sceptre's clients will have access to alternative asset products on FGG's global platform, and Sceptre will advise Canadian investors on their alternative investments.

Tom Czitron, managing director of Sceptre, said in an interview that growth in Canada's hedge fund marketplace has been sporadic, and the nation is still a few years behind the United States, so pension funds and individuals in the Canadian market need alternative asset exposure. "With the commodities boom Canada has done well, but that can't last forever," he said. "A lot of people have started single-manager hedge funds, and a lot of pension funds have brought that process in-house and have their own fund of funds divisions. We are targeting a level just below that."

Mr. Czitron said Sceptre searched a number of asset managers of various sizes for a partnership before settling on FGG, which manages about $16.6 billion. "We partnered with the best fund of funds shop we could find. We wanted a mid-sized company because for a larger firm our sector wouldn't be significant. And small firms wanted to cash out of the sector and sell us their [fund of funds] companies," he said. "It ultimately became a question of how significant we would be to the other firm. We wanted to offer something unique in the marketplace."

FGG, founded in 1983, offers multiple single-manager and multi-strategy hedge funds, funds of funds, customized portfolios, structured products, real estate funds and private equity funds.

"We have great confidence that Sceptre's extensive network of investors will appreciate the quality and diversity of FGG's platform of products, and the institutional investment and risk management with which we support it," said David B. Horn, partner and chief global strategist of FGG, in a statement. "Through this new endeavor, the FGG team stands ready to offer equally distinguished hedged strategies and services to serve the alternative investment needs of Sceptre's clients."

Sceptre, launched in 1955, manages $9.5 billion in assets and manages retail and private clients' portfolios and pooled fund portfolios for pension and corporate plans, government-sponsored funds, universities, unions, charitable foundations, endowments and reserve funds of insurance companies.