In its first phase, the company will use two Luxembourg-based hedge funds – equity and fixed income – designed to parallel risk objectives for both asset classes.
To provide diversification, both funds will also seek to provide non-correlating returns to any index. To get the funds rolling, ING Group will invest $25 million to form the funds and the company’s asset management arm said it “anticipates the continued creation of similar products in response to significant demand from ING’s client base.”
With the addition of these hedge fund offerings, the company is expanding into the “absolute product return offering” arena by providing hedge fund, private equity fund of funds, while committing firm capital, operating support and marketing services to managers of alternative investments.
These offerings include a variety of style specific disciplines that include risk arbitrage, long/short equity and sector funds, according to Seth Wohlberg, ING Alternative Asset Management.