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24 Oct 2006

Two banks set up Hedge Funds

Eastern Europe
Erste Bank AG, Austria’s Vienna-based lender, has set up a new hedge fund with $30 million of Erste’s own capital on October 1. The Maximum Emerging Alpha Fund will invest 40% of its capital in Central and Eastern Europe.

Erste has put Eastern Europe at the center of its strategy. Last week it paid $2.76 billion to buy Romania’s largest lender, Banca Erste, which has more than $1.3 billion invested in hedge fund Comerciala Romana SA.

Part of the Maximum Emerging Alpha capital will be used to seed new funds, and expects to invest in between 20 and 30 hedge funds at any given time, the company said. It aims to make money by investing in hedge funds active in central and eastern Europe as well as by giving hedge-fund managers from the region and other emerging markets seed capital for their funds. It will also invest directly in emerging-market financial instruments.

Harcourt has launched their first onshore fund of hedge funds product structured specifically for Canadian investors. The Belmont Dynamic Growth Fund has aligned itself with the Royal Bank of Canada to offer what the firm believes will be a superior product solution.

The Belmont Dynamic Growth hedge fund was launched on August 1 and is investing in existing Belmont fund of hedge fund managers with long-term performance records. Presently, the portfolio is tactically positioned having exposure to Asia, Europe, US Long/Short Equity, Fixed Income and Market Neutral strategies.

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