Hermes BPK Partners LLP (Hermes BPK), the USD1.6 billion alternative advisory boutique and fund of hedge funds, and Northern Lights Capital Group LLC (NLCG), a Seattle based private equity firm focused on asset management with AUM of USD11 billion, are joining forces to launch a new investing platform designed to identify and provide access to early stage hedge fund managers for global institutional investors and pensions funds.
The joint venture will combine Hermes BPK’s expertise in the alternative investing and fund of hedge funds marketplace, which includes identifying and evaluating drivers of risk, actively engaging with managers to ensure operational efficiency, and facilitating growth through marketing and distribution services, with Northern Lights’ demonstrated ability to identify and support outstanding asset managers.
Furthermore, it will provide an investing framework which incorporates operations, risk management, strong governance and transparency required by institutional investors. The partners will invest “acceleration capital” to hedge fund managers early in their growth cycle or seed capital into new hedge funds, and seek to capture the return premium associated with investing in talented, early stage fund managers, while also participating in the economics of the growth of the management firms. The partnership will provide strategic resources to hedge funds, including sales and marketing.
Matteo Dante Perruccio, CEO and Founding Partner of Hermes BPK Partners, says: “Over the past few years, Hermes BPK has established itself as a leader in the alternative solutions space, with a key commitment to strong corporate governance and investor alignment lying at the heart of our ethos. Northern Lights Capital Group shares our commitment to investor alignment and partnering with Northern Light Capital Group brings together combined expertise to launch an innovative and new acceleration seeding strategy focused on active management. Furthermore, this unique approach to seed/accelerator funding looks to enhance returns and mitigate business risk for institutional investors over the long term.”
Paul Greenwood, Managing Director, Northern Lights Capital Group LLC, says: “Following the financial crisis in 2008, there has been a tremendous shortage of capital available to support new alternative managers. Yet history has shown that it is often these early-stage firms that deliver the best returns. Moreover, many established managers are in need of acceleration capital to support the ongoing growth of their businesses, driven in part by expectations of the institutional investor community for more sophisticated infrastructure and risk management capabilities.”