Mellon Capital Management Corp., an investment unit of Mellon Financial Corp.'s asset management arm, said Tuesday that it had received $100 million of funding to pursue its long-duration, alpha-plus strategy.
The product is designed to help pension funds hedge against the liabilities in their plans while seeking to achieve equity-like returns. This is the fourth portable alpha strategy started by the company this year.
Mellon Asset Management is the third-largest manager of defined benefit assets. The long-duration, alpha-plus strategy adds to its capabilities in both asset management and asset servicing for the pension plan market.
The strategy combines exposure to the Lehman Brothers 20-Plus-Year Treasury Index with Mellon Capital's proprietary global alpha strategy, which takes long and short positions in global equity and sovereign bond and currency markets. Pension plan liabilities typically rise when interest rates fall and decline when interest rates rise, which is similar to the performance of longer-term Treasury bonds.
Mellon Capital, which is based in San Francisco, had $148 billion of assets under management at June 30.
