A hedge fund platform that includes products from Merrill Lynch wealth management is being reorganized. Management wants to combine several funds of hedge funds into one master fund.
According to a proposal to investors, this will reduce expenses by spreading fixed costs over more assets and also has the advantage that the sales effort can focus on one product rather than several.
Investors in the merging funds are to receive shares in the resulting master fund, which is described as having the same multi-strategy focus as the separate vehicles.
The proposed merger may be a response to the current difficult situation for most funds of funds, which have lost assets since the 2008 crisis and have trouble attracting customers. One fund should be easier for the BofA group to market than a set of similar funds.
Other fund of funds managers have also been consolidating their products and some firms have merged with others.
Tags: Bank of America, Merrill Lynch
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