Non-directional strategies have an absolute return objective, irrespective of market movements.
A hedge fund is a catch-all term for investment pools that are not regulated as a mutual fund and that employ a variety of investment styles that may involve going both long and short, hedging exposure to the broad market. Hedge funds may use leverage to amplify returns and usually charge incentive fees.
First Union Absolute Return is structured as a limited partnership with no more than 99 investors and is only available to those who meet the Securities and Exchange Commission’s definition of an accredited investor – a net worth of at least $1.5 million, according to Dow Jones.
First Union’s six other hedge fund offerings include domestic long/short equity, international long/short equity and fixed-income strategies. Ivy Asset Management, a subsidiary of the Bank of New York, is the domestic subadviser for all of the First Union funds.
Long/short equity funds buy some stocks and sell others short but tend to place bigger bets on the upside. Alternative Investments Group has $500 million under management, including $400 million in hedge funds and $100 million in private equity.
First Union formally completed its acquisition of Wachovia earlier this month, adopting its name. However, various operating subsidiaries continue to do business under the First Union brand.