New Fund Despite Tough Conditions

Chidem Kurdas

A very difficult environment for raising money, in particular for fund of funds, has not stopped the launch of investment vehicles. But the new products tend to come from firms with established distribution networks, which gives them a better chance of finding clients. They also tend to have a broader investment agenda than hedge funds-only vehicles.

Thus Ladenburg Thalmann Asset Management is starting a fund of funds that will channel money to hedge funds, commodity trading advisors, real estate trusts and other alternative investments. The manager is Philip Blancato, who’s been with Ladenburg Thalmann since 2004. He used to work at Prudential Securities.

The asset management business is part of Thalmann Financial Services Inc., a publicly traded investment bank and brokerage. Two of the company’s subsidiaries, Investacorp and Triad Advisors, provide services to more than a thousand independent financial advisers. Established relations with registered investment advisors are expected to help the new fund.

Fund of funds managers incurred investors’ wrath in 2008-2009 because of disappointing performance and the Bernard Madoff fraud scandal, as well as the fact that many underlying hedge funds froze redemptions and hence funds of funds became illiquid at a time when investors needed money. Since then investors have largely withdrawn from fund of funds.

However, a few notable exceptions, Blackstone in particular, have succeeded in raising capital for fund of funds.


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