Mellon Institutional Asset Management will expand its Australian office as it prepares to launch two long/short local funds.

As well the group is in talks with new joint venture partner West LB Mellon Asset Management Australia regarding the manufacturing and distribution of a global equity long/short fund. “We’re talking to West LB about a global equity product that might be exportable to the US,” Mellon president, Ron O’Hanley said. In Australia, West LB Mellon Asset Management offers an active Australian equities product and an equitised Australian equity long/short fund which is closed to new investors. Mellon will roll out its planned market neutral and long-biased Australian equities fund, which will be managed out of San Francisco, with a major seed institutional investor before early next quarter. James Gruver, managing director of Mellon Global Investments Australia, said he expected the product to reach capacity quickly. Mellon established its first Australian office three years ago and has since grown funds under management to over $10 billion. “We understand a disproportionate amount of growth in the next five to 10 years will be in Asia Pacific. You’ve got probably the most sophisticated market in the world,” O’Hanley said. The firm will add resources to its Australian operations which will be in both client service and product design. Gruver is currently negotiating additional staff numbers for an Australian office which has grown from just himself three years ago to eight people today. “Incremental investments will first go to Asia Pacific,” O’Hanley said. Also on the agenda of the asset manager, which has over $1 trillion under management worldwide, are multi-manager pension funds. “We’re looking at doing that in Australia,” Gruver said. Mellon already offers a suite of its managers in a multi-manager pension offering in the US and is currently in discussions with a number of potential seed clients in Australia. “I see a big future for that,” O’Hanley said.

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