Mellon HBV starts convertible arbitrage

New York, Feb. 5 - Mellon Financial Corp. said its Mellon HBV Alternative Strategies subsidiary has started a convertible arbitrage program.

Heading the management team will be portfolio manager Stuart Dubson and senior analyst John Ginsbury.

Dubson was most recently chief investment officer and managing general partner of Sparta Partners LP. He previously managed global convertible arbitrage portfolios at various hedge funds, beginning his career at Elliott Associates LP. He also established the convertible securities sales and trading department for Banque Arabe et Internationale d'Investissements in New York and Brean Murray & Co. Inc.

Ginsbury was most recently the director and chief investment officer of Manco Ltd., and a general partner of Sparta Partners. He was a director of capital markets at Banque Arabe et Internationale, supervising $2.0 billion in assets, and chairman of its Intermarket Fund, a global convertible arbitrage fund.

The team will also include trader Jim Burns and analyst Tom Balamaci. Mickey Harley, Mellon HBV president and chief investment officer, will oversee the investment team.

"The large increase in the number and size of new convertible issues should translate into many compelling investment opportunities," said Jonathan S. Bean, Mellon HBV managing director, in a news release. "This new strategy rounds out our arbitrage offerings and adds a new dimension to our multi-strategy discipline."

Mellon HBV will offer the investment only to selected financially sophisticated clients, both in the United States and offshore.

Mellon described the addition as "a natural extension" to its current capabilities.

The investment team has a five-year track record and combined experience of more than 70 years in convertible arbitrage investing, Mellon said. Its investment process is designed to take advantage of pricing inefficiencies across a spectrum of convertible strategies and uses the team's expertise in hedging various risk components.

Mellon HBV has headquarters in New York and has more than $1 billion in assets under management in four categories: arbitrage, divided into U.S. risk arbitrage, global risk arbitrage and convertible arbitrage; distressed, divided into hedged distressed, long-only control-oriented distressed and long-only trading-oriented distressed; special situations/event driven, divided into U.S. special situations and European event driven; and multi-strategy investing.

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