Arden to Manage JPMorgan Hedge Fund Assets

Date: Friday, June 26, 2009
Author: Zachery Kouwe, The New York Times

Arden Asset Management, the hedge fund of funds manager, said on Thursday that it had struck a deal with JPMorgan Chase to manage a $1.1 billion portfolio of hedge funds for its investment banking unit.

As part of the agreement, a team led by Shakil Riaz, the chief investment officer of JPMorgan’s proprietary hedge fund of funds program since its inception in 1995, will join Arden. The plan is part of JPMorgan’s overall strategy to reduce the bank’s principal investments in hedge funds.

JPMorgan’s asset management unit, which has its own fund of funds business that manages capital for outside clients, is not part of the deal, and the bank will continue to support that business.

Hedge funds of funds, which charge fees for investing in a wide range of other hedge funds, have seen their assets dwindle recently, since investors learned that several funds had directed investments to Bernard L. Madoff’s $65 billion Ponzi scheme.

Several funds of funds also came under pressure from investors after learning that withdrawals were being limited after losses at several firms that the funds invested with.

“Arden’s high-quality institutional infrastructure and well-established investment processes were important in our decision to select the firm to manage these assets,” said Robert Case, head of JPMorgan’s principal investment management unit, in a statement.

The assets from JPMorgan will bring Arden’s total assets under management to about $8 billion, Arden said in a statement.