Thames River Capital (TRC) is launching a new London-listed seeding vehicle for start-up hedge fund managers.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
TRC is launching the London-listed investment company, Thames River Multi Hedge PCC Limited, and its sub‑fund, Thames River Hedge+ (Hedge+).
Hedge+ will initially be invested in a focused portfolio of 10-15 established hedge funds with weightings of between 5-15% each. Up to 50% of the portfolio is expected to be made up by five fund holdings.
As opportunities arise, Hedge+ plans to allocate money to managers in the early stages of their development, as well as providing seed capital to "start up" hedge funds. By seeding new hedge funds, investors are able to participate in the business returns associated with a profitable and rapidly growing industry (through fee discounts, dividends and equity exit multiples).
Hedge+ will be managed by Ken Kinsey Quick, Head of Multi-Manager at Thames River Capital. Ken has over 10 years experience of investing in hedge funds. He previously worked at Haussmann Holdings and was Chief Investment Officer at Coronation International where he managed a number of multi-manager funds across the various hedge fund strategies and invested in both established and start-up managers.
Commenting on investing in start-us, Kinsey Quick said: "Start-up managers generally tend to significantly outperform more established managers due to a number of reasons. These reasons include: lower assets under management (easier to manage USD 50m as opposed to USD 5bn), strong financial incentive due to performance fee structure, management is more focused i.e. the key manager is CIO as opposed to CEO of a larger business."
He added: "By achieving revenue sharing deals with our start-up managers, we are able to allow our investors to participate in a profitable industry. In addition, secondary benefits can include added transparency, capacity, fee discounts."
Hedge+ is expected to have a low correlation to traditional equity and bond markets and the aim will be to maximise capital appreciation, in all market conditions through hedge fund and related investments.
UBS Investment Bank is acting as sponsor, broker and placing agent in respect of the placing and offer for subscription which will commence on 21 January, 2004. The placing will close on 6 February 2004 and the public offering on 16 February 2004. Dealings are expected to commence on 23 February 2004.
Hedge+ will be a cell fund of Thames River Multi Hedge PCC Limited, a <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Guernsey domiciled protected cell company with limited liability, with a primary listing on the London Stock Exchange and a secondary listing on the Channel Islands Stock Exchange. The Company will offer two currency hedged share classes denominated in Sterling and Euros and hedged against the US Dollar.
Background Note: Thames River Capital (TRC) was established in 1998 to provide investors with a range of absolute return products (hedge funds and funds of hedge funds) as well as traditional investment funds. Since launch TRC has grown rapidly and currently manages approximately USD 3.2 billion. TRC has established a strong reputation for excellent performance and is now one of the UK's leading hedge fund managers.
copyright hedgeweek 2004