JPMorgan has set up a new business unit focused on developing structured products linked to alternative investment funds. The unit, JPM Structured Fund Management, has several strategies in the pipeline, with the first set to launch June 1, said Pierre Doize, head of hedge fund structured investments for France, Benelux and Switzerland. Based in Paris, the new unit will predominantly target JPMorgan's private banking clients globally, according to DW sister publication, Alternative Investment News. "This is a brand new business," Doize added. "JPMorgan hasn't done anything like this before."
Other dealers already have separate groups set up to structure alternatives via structured products, such as SG Corporate & Investment Banking's Lyxor Asset Management.
The first strategy will be structured for French investors and will provide leveraged exposure to a portfolio of hedge funds assembled by the firm, said Doize. The portfolio will be highly-concentrated, investing in only six hedge funds--all of which are currently closed to new investors. Doize explained JPMorgan was able to secure capacity with these managers thanks to existing relationships and the firm's clout in the industry. JPM SFM will manage the portfolio of hedge funds, while the bank itself will structure the wrapper, he added.
The second vehicle will be registered as a French fund and will be managed by Swiss hedge fund firm Pentium Fund. It will launch in early June, said Doize. Pentium ceo Vicente Zaragoza declined to comment.
