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Hedge funds have garnered some bad press lately, for ostensibly charging sky-high fees while providing little extra value. Yet Bank Leumi evidently sees a future in them there vehicles.

The Israeli bank Tuesday launched a joint venture in New York with Spring Mountain Capital. Leumi Alternative Investment, of which Leumi will own 75%, will be employing "alternative investment management," mainly - hedge funds, or funds that invest in hedge funds.

Spring Mountain will be handling the fund management, while Leumi will be handling marketing. They will start off with hedge funds and mean to expand the portfolio to include REITs (real estate investment trusts) and other products.

However, if you're reading this paper rather than Haaretz online, you're probably barred from investment: the venture will be prohibited from offering its hedge funds to clients in Israel and the United States, which leaves the customers of Leumi South America, where the bank has several branches and representative offices.

The minimum investment in the hedge funds will be $50,000.

The new venture remains subject to regulatory approval. Ezra Merkin of the Gabriel investment group, which owns 4.9% of Bank Leumi's shares, mediated the deal and advised on it. He joined the celebratory launch in the Big Apple and spent most of the session sending text messages from his cell phone.