NewAlpha has launched NewAlpha Genesis 4, a contractual fund currently being established with a view to invest in French and foreign hedge funds run by early-stage fund managers.
NewAlpha aims to raise EUR200m from European institutional investors, family offices, private banks and sovereign funds. The closing date is scheduled for end-October 2010.
NewAlpha Genesis 4 plans to take advantage of favourable supply and demand conditions on behalf of institutional investors.
According to the firm, increasingly stringent regulations and consolidation in the asset management industry are encouraging many fund managers to branch out on their own. At the same time, institutional investors are reluctant to invest in these young, less-established managers, which results in highly advantageous terms for seeders, who have thus proved to be a vital link in the asset management value chain.
NewAlpha has invested a total of EUR380m in 14 mostly foreign fund managers since its inception in 2003.
Antoine Rolland, NewAlpha’s chief executive and chief investment officer, says: “The crisis in 2008 prompted investors to pool their positions with the most established managers, generating major concentration risks and depriving them from the innovative potential offered by smaller, young fund managers. These early-stage managers deliver higher returns, mainly due to their relatively pure investment style and their adaptability to increasingly turbulent market conditions.”
