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Credit Suisse in Preliminary Talks to Buy Mesirow Fund of Funds

Date: Friday, September 4, 2009
Author: Katherine Burton, Bloomberg

Credit Suisse Group AG held preliminary talks with Chicago-based Mesirow Financial Holdings Inc. about buying its $11 billion business that invests clients’ cash in hedge funds, according to two people familiar with the discussions.

Credit Suisse, based in Zurich, already manages almost $15 billion in its hedge fund of funds unit.

The talks are in the early stages and could fall through, the people said. Officials for both Credit Suisse and Mesirow declined to comment. The talks were first reported in Alternative Investment News.

Even though fund of funds underperformed single-manager hedge funds last year and in 2009, some larger firms have been able to attract money this year from institutions too small to make investments directly into hedge funds.

New York-based Blackstone Group LP had inflows of $4 billion in the first six months of the year into its funds, including hedge fund of funds, according to its second-quarter earnings statement.

Hedge fund of funds lost 21.4 percent last year, compared with about 19 percent for single-manager hedge funds, according to Chicago-based Hedge Fund Research Inc. This year through July, hedge funds have climbed about 12 percent on average, compared to 6.8 percent for fund of funds, the research firm said.

To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net