Bank of New York offers hedge fund services to AFPs

The Bank of New York (NYSE: BK) is looking to offer financial services to Chile's pension fund managers now that they are allowed to invest in hedge funds, Chilean daily El Mercurio quoted Bank of New York VP Alan Griffith as saying. Griffith is currently visiting Chile as part of a scouting mission to drum up interest among pension managers, or AFPs, looking to take advantage of recent legislation and the bank's experience in the hedge fund business, the paper said. Earlier this month, Chile's government raised the offshore investment cap for AFPs from 25% to 35%. That measure was later extended to allow investments in structured financial instruments such as hedge funds. Hedge funds will allow AFPs to minimize risk related to both fixed and variable rate investments, Griffith said. "We choose more conservative hedge funds. I think that they could provide a great opportunity for pension funds," he added. Hedge funds allow participating institutions to adopt more aggressive investment strategies currently unavailable to mutual funds, including short selling, leverage, program trading, swaps, arbitrage and derivatives.