Orix Corp. has big plans for the New York hedge fund it is buying, Mariner Investment Group.
The Japanese firm aims to boost assets at Mariner to US$20 billion within five years. Orix USA, the Orix subsidiary that agreed to by Mariner's parent company earlier this week for a reported US$185 million, said it would rely in part of growing demand from pension funds.
"Given the level of interest rates in the U.S. and elsewhere, the low rate of returns is pushing pension investors among others to invest more in the hedge fund space," Orix USA President James Thompson told Bloomberg News.
Mariner currently manages US$11.7 billion. Thompson said Orix US would co-invest with Mariner as well as help it set up new funds, but did not offer any details.
"Mariner’s management team believes they should expand a range of fixed-income opportunities and they should also offer certain types of equity products,” Thompson said. “Hedge fund business is very much customer-driven so you have to find products or designs of product that the customer wants."