Monday, 8 February 2016
Last updated 2 days ago
Nov 5 2012 | 2:12pm ET
Add Wells Fargo to the list of firms eyeing a foothold in the fund of hedge funds space.
The bank's asset management arm is in the market for a fund of funds firm with between $5 billion and $12 billion in assets under management, its CEO said. It joins Principal Global Investors in seeking out a fund of funds, and hopes to follow in the footsteps of Kohlberg Kravis Roberts and Franklin Templeton Advisors, which recently acquired Prisma Capital Partners and K2 Advisors, respectively.
"We are keen to provide advice on alternatives allocations," Wells Fargo Asset Management CEO Mike Niedermeyer told Financial News. "It is the thing our clients request most often."
Niedermeyer added that WFAM preferred a fund of funds to buying or starting a hedge fund of its own, favoring access to skilled hedge fund selection and allocation to direct management.
And while funds of funds' share of the hedge fund market continues to drop, Niedermeyer seems well aware that the industry's model will have to change. The WFAM CEO says he expects fees to drop across funds of funds, including whichever firm Wells Fargo is able to buy.