SPA 2007: Hedge fund-linked structured products have value for niche uses, panelist says

By Sheri Kasprzak

New York, March 27 - Hedge funds as an underlyer in structured products is a niche but with specific valuable applications, according to a panel at the Structured Products Association's conference held Tuesday in New York.

"The market is more of a niche market - with less broad appeal - for hedge-fund linked structured products," said Jason Garmise, a director at Ivy Asset Management.

One particular area for future growth from the market may be tax-efficient products and leveraged products.

Garmise said that with the advent of open architecture, the market is seeing some deals offering investors portable alpha - bringing in non-correlated returns to a portfolio - but more as a product for pension funds.

"We've seen a lot of discussions around portable alpha and that part of the market continues to grow," he said.

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