Melanion Capital launches seeding programme for new hedge fund talent
Melanion Capital, Paris, is inviting early-stage hedge fund managers to apply for seed capital and to work in partnership with the Melanion Group.
Successful applicants will be hired by the Group and get a seeding ticket of up to USD10 million in a dedicated fund or managed account for two years and then, with a proper track record, be opened to investment from Melanion’s range of clients.
Melanion’s seeding program derives from its own experience. The firm was the first alternative manager to specialise in investment in dividend futures, but from the outset Melanion was faced with, institutional investors with a very high bar to on-boarding managers (track record, minimum AUM, investment constraints, etc), seeders looking to take a costly equity stake in a new managers’ business, and existing hedge funds aiming to assimilate fresh talent while claiming the credit and passing on their institutional investors’ investment constraints.
“Our experience suggests that many talented managers feel unable to fulfil their true potential because of the high entry costs of going independent,” says Jad Comair, Founder and CEO of Melanion.
“We faced these same issues when Melanion launched in 2013 and were obliged to stretch our limited financial resources to take our first steps. Today, however, we have capital available and are looking to develop the business by partnering with some of the stars of the future.”
Comair underlines the fact that the target market for new managers within the Melanion programme will be HNW investors rather than institutions saying that institutional investors’ demands, for example, for excessive diversification and reduced leverage tended to restrict potential performance and limit interest to those investment strategies that are highly scalable.
“Melanion is happy to seed exceptional managers focused on niche strategies which have strong performance potential but which will not appeal to institutions,” he says.
“We strongly believe that current institutional constraints which managers have to work with, erect too many barriers to new launches and subsequent performance. So, while traditional asset managers start with HNW clients and finish with pension funds, we only focus on the HNW sector and the new managers who choose to partner with us will do the same,” says Comair.