Vivaris Capital has created what it says is the first private equity hedge fund, which is designed to deliver superior alternative asset returns while mitigating downside risk.
The structure deployed by Vivaris uses a portfolio of investment grade securities to diversify risk and to provide liquidity.
The investment strategy targets middle-market, well-established companies and late-stage technology businesses that are at an inflection point and poised for growth. Capital and aggressive management then drive product, sales and market expansion.
The fund also invests in and acquires value-added residential and commercial real estate developments where renovations and marketing can lead to significant value appreciation.
Vivaris’ goal is to offer investors an enhanced risk-return profile for alternative asset investing. The firm’s proprietary structure is designed to return the investor’s initial principal investment in the event of significant losses on the alternative asset investments. The securities portfolios, made up of investment grade assets, are low on the volatility scale and their gradual appreciation serves as downside protection for the alternative asset investments. The firm borrows against the portfolios in a controlled strategy and uses collateralised funds to make opportunistic investments.
Target returns as a whole for the securities portfolios should be able to cover all accrued interest for the credit line as well as offset losses from the alternative asset investments, thereby protecting the investor’s initial principal.
J Christopher Mizer (pictured), managing partner of Vivaris Capital, says: “We are very excited to launch the new fund. It gives investors access to alternative asset opportunities, which are becoming more important each year as a source of returns in the current low interest, high valuation environment. We also feel like we have created an investing model that addresses many of the historical problems with legacy funds in the industry.”
