Mercantile Bankshares Corp. announced Monday that it had introduced a registered fund of hedge funds for outside investors.
Mercantile Alternative Investment Funds are managed by Mercantile Capital Advisors Inc., a registered investment adviser that is the asset management subsidiary of Baltimore's Mercantile Bankshares. The fund was opened based on the investment unit's three years of experience in managing hedge funds for internal investors. The hedge funds have produced steady annual returns with low volatility, according to Mercantile.
The alternative investment fund family has three offerings: a relative-value fund of funds and two long-short equity funds of funds, with one focused on global equity and the other primarily on small-cap-oriented strategies. The funds concentrate on merger arbitrage, distressed debt, capital structure arbitrage, market-neutral equity, and long-short equity with a philosophy of maintaining low correlation to the broad stock and bond markets. Mercantile employs independent subadvisers to assist in manager selection and allocation.
The alternative fund family has more than $150 million of committed capital. The investment minimum is $75,000, and the funds are open to institutional and high-net-worth investors in both on- and offshore vehicles. Mercantile Capital Advisors manages more than $3.7 billion of client funds in equity, fixed-income, real estate, and hedge fund portfolios.
