KeyCorp's investment management division is looking to team up with alternative investment managers to offer products outside its core offerings.

Key Asset Management would probably share revenue with a manager that in turn would buy into several investment partnerships with a variety of strategies, said Richard K. Buoncore, the unit's president and chief operating officer.

In this format, commonly referred to as a "fund of funds," funds that are not performing well can be replaced. The funds, which typically require $1 million minimum investments, are for wealthy investors.

"Alternative investments are a hot topic" among investors wanting to hedge the risks of returns gained elsewhere, especially from the U.S. stock market, Mr. Buoncore said.

"By the time we'd build that capability it would be too late. People are willing to partner now," he said.

Key Asset Management is looking at a "couple" of firms, he said, and is unlikely to do an acquisition in the area.

The category-dubbed "alternative" to denote attempts to hedge risks of long-term, traditional allocations-covers investments such as commodity and currency futures, convertible bond arbitrage, private equity, and venture capital.

Banking companies that offer qualified clients access to alternative investments include Bankers Trust Corp., Bessemer Group Inc., Chase Manhattan Corp., IBJ Whitehall Financial Group, National City Corp., and PNC Bank Corp.

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