Hedge fund firm PAAMCO integrates smaller group

Date: Wednesday, December 3, 2008
Author: Svea Herbst-Bayliss, Reuters

Pacific Alternative Asset Management Co (PAAMCO), which invests $9 billion in hedge funds, said on Tuesday it is integrating a smaller hedge fund investment group to expand its reach in Asian markets.

PAAMCO, a prominent hedge fund-of-funds firm, will incorporate KBC Alpha Asset Management, which invests roughly $700 million mainly in Asia.

KBC Alpha Asset Management's founder Neale Safaty and other investment professionals will work for Pan Asia Alpha Strategies, a separate division within Irvine, California-based PAAMCO.

"The integration of Pan Asia Alpha Strategies into PAAMCO's global operations gives us the ability to tap into a team of experienced and talented individuals with extensive experience across Asia, and to further enhance our clients' exposure to hedge funds in this important and developing region," PAAMCO chief executive officer Jane Buchan said in a statement.

The move comes at a time hedge funds are delivering their worst performance ever and many pension funds, endowments and wealthy investors are demanding their money back. The average hedge fund has lost roughly 22 percent this year, according to data from Hedge Fund Research, with the Asia Composite Hedge Fund Index off 20.33 percent.

Many funds of hedge funds, which create a portfolio of hedge funds for clients to help spread the risk, have been especially hard-hit by recent redemption notices, investors said. (Reporting by Svea Herbst-Bayliss)