The Cue Ball Group has formally launched its Alternative Investment arm through the announcement of the Cue Ball Discovery Fund (CBDF).
The new fund is a fund of hedge funds targeting early to mid-stage managers typically less than three years old and with less than USD 300m in assets under management. Former Citigroup Managing Director of Institutional Investments, Bradley R Balter, CFA, has joined Cue Ball as the company's fourth Partner and will spearhead the CBDF as Portfolio Manager.
The Cue Ball Discovery Fund focuses on managers with smaller asset bases who Cue Ball believes can generate superior returns in the market than their larger peers. At any given time, CBDF will focus on 12-15 best of breed managers, representing a concentrated but diversified and weighted portfolio.
Balter has over 15 years of experience in the financial services and hedge fund industry. Having serviced some of today's largest and most successful hedge funds, he has developed a keen ability to identify best of class hedge fund manager talent. Balter leads a team of three others including Victor Chiang, Chief Technology Officer and Risk Officer, Jay Warner, Financial Analyst, and Stephanie Mayville, Portfolio Administrator and Compliance Officer, who all service the Fund and its investors.
CBDF has also positioned itself ahead of the trend with regard to the fee compression expected to permeate the hedge fund industry. Through its innovative fee structure that focuses on absolute returns and alignment with investors, the fund charges an incentive fee that incorporates a hard hurdle. The Cue Ball Discovery fund receives a 10% incentive allocation only on returns in excess of the three month Treasury bill plus 300 basis points.
In utilising a Chief Technology Officer, CBDF places significant emphasis on operational and infrastructure risks, as well as continuous monitoring of all invested funds for potential organisation, infrastructure or investment style changes in reaction to market fluctuations.
'We are thrilled to have Brad and his team spearhead our efforts in alternative investments,' says Tony Tjan, CEO of the Cue Ball Group. 'Their diligence and expertise in hedge funds provides an excellent complement to our private equity practice.'
Commenting on his new role, Balter says: 'My team and I are very excited to join the Cue Ball Group of Companies. We feel that the synergies between private and public equity offer unique opportunities for collaboration, while providing true value add to our fund and the managers with whom we invest. The network and platform that Cue Ball provides, fits perfectly from a philosophical and practical standpoint. We look forward to being part of Cue Ball's development into a top tier firm across both the private and public equity universe.'
Background note: The Cue Ball Group is a Boston-based venture and alternative investment firm founded in 2005 by Tony Tjan, a successful entrepreneur, long-standing private investor and strategic advisor to CEOs. The group is co-managed by a group of other former partners of leading advisory and financial firms. Cue Ball's Venture Strategy focuses on consumer and information businesses with a preference for those between USD1-25 million in revenue. Cue Ball's Alternative Strategy is delivered through the Cue Ball Discovery Fund, a highly selective fund of hedge funds focused on early- to mid-stage hedge funds.