Standard Life enters hedge fund arena with Aida buy

Date: Wednesday, March 24, 2010
Author: Reuters

British insurer Standard Life's (SL.L) fund arm has made its first foray into hedge funds with the acquisition of London-based Aida Capital, as clients begin to return to the industry in the wake of the credit crisis.

Standard Life Investments (SLI) will pay a "modest upfront" fee for a 75.1 percent stake in the fund of hedge funds firm, which runs more than $50 million in assets, a spokesman said.

Clients invested a net $2.5 billion into funds of hedge funds -- which charge clients a fee for selecting a basket of funds -- in the fourth quarter following gains of 11.6 percent last year, according to Hedge Fund Research.

However, some investors have raised questions about these portfolios after limited access to their money during the crisis.

"We have considered an expansion into new alternative asset classes for some time and believe that the acquisition of Aida Capital ... would present us with a great opportunity to strengthen our alternative capacity," SLI chief executive Keith Skeoch said.

SLI ran 139 billion pounds ($207 billion) in assets at end-December.