Credit Suisse Forms Giant Hedge Fund of Funds

August 22, 2002 ( - Credit Suisse Group is merging some hedge fund operations, and in the process forming one of the world's biggest single hedge fund of funds that will manage about $6 billion in assets.

According to a Reuters news report, the new group will pool $3.5 billion managed by Credit Suisse Asset Management (CSAM), the institutional and mutual fund unit of Credit Suisse First Boston (CSFB), and $2.5 billion managed directly by CSFB.

The Credit Suisse announcement comes at a time when firms are scrambling to come up with new ways to bring in more hedge fund business now that hedge fund returns have been shriveling.  Since January the average hedge fund’s return has been flat, a meager showing compared with the double-digit returns seen a few years ago.

So-called hedge fund of funds are designed to help spread the risk in hedge fund investing by having managers select a portfolio of funds for their clients. But they also are expensive, adding fees for selecting managers on top of fees charged by individual hedge funds for managing the money, Reuters pointed out.

Leader “Board”

In a statement, CSFB said its new group would be managed by Thomas Gimbel, formerly managing director at CSAM, and Jim Vos, formerly managing director at CSFB. Alain DeCoster, who co-managed the CSAM funds with Gimbel, will leave the firm at the end of the month.

The new group will draw on the resources from both CSAM and CSFB.