Massimo Pedrini

The Bank invests only in multi-strategy funds of funds based and registered in Switzerland. About 10% of the Bank's total assets under management are invested in funds of funds. This is a decrease from several months ago when the bank had between 15-20% of its assets allocated to funds of funds. The Bank does not invest in private equity funds but will look at real estate projects. They have invested with structured products in the past and would be willing to look at them again as the idea of capital protection makes sense for their clients.Right now the bank is not looking to research managers or allocate for at least 3 months most likely six. At that point they will be starting a fund of funds and will be interested in single manager funds.The Bank prefers managers that are global in exposure and not region-specific however they believe that an Asian or Latin American fund of funds may be interesting. The Bank does not invest in sector-specific funds.Banca dello Stato requires that managers have $50 million in assets under management at the very least because they will not hold a position of more than 10% in any fund. Funds must have a track record of at least 3 years and the Bank will not look at any funds whose strategies are back-tested.The Bank prefers to receive monthly liquidity but will accept quarterly at the very least. They will not invest in funds with lock-ups. Underlying managers in the funds of funds may use leverage but on the funds of funds level they will make an assessment based upon the overall strategies.The Bank has traditionally invested in funds with volatilities below 5% but is beginning to look at funds with higher levels of volatility. Return expectations will depend on the volatility level.Initial investment is at least $5 million and due diligence takes just a few weeks to a few months at most.