"I don‚t think I‚m maligning alternative investments such as these as riskier," says Thomas Weisel Partners spokeswoman Amanda Duckworth. "In this kind of environment, people don‚t want to do that."
Under the original plan, announced in December, the two companies set up Scudder Weisel Capital to offer affluent investors access to research and investment vehicles normally relegated to institutional clients. The company planned to offer investors direct access to IPOs, original research, venture-capital funds, private-equity funds and hedge funds through a distribution channel of brokers and financial advisors.
It was just one of many examples of how financial-services companies are trying to zero in on investors with $1 million or more in assets–the generation of millionaires created by the historic bull market of the 1990s.
"Scudder Weisel Capital will put affluent investors or their financial advisors on a par with the big smart-money players," Boyd Fellows, the company‚s CEO, said in December.
But at the time of the cancellation in late March, the company‚s only product was one fund, the Scudder Weisel Capital Entrepreneurs Fund, which was scheduled for liquidation April 30. The companies haven‚t commented on the size of the fund, but published reports say it only accrued about $20 million in assets.
In addition to the declining stock market, Scudder also shifted strategy and decided it would rather pursue such a strategy alone, when the time is right, Scudder spokeswoman Shannon Bell says. "It was a confluence of events," she says.
Duckworth, of Thomas Weisel, says the company doesn‚t know when it would pursue the goal again.
"Until there is a dramatic change (in the market), we have no intention of relaunching such a business," she says.
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