Atlantic Asset Management, Montage Asset Management and Palmer Square Capital Management have formed a joint venture to make seed investments in hedge funds.
The Seed Fund is designed to not only provide investment capital to emerging hedge funds, but also to supply investment managers with access to the combined platform, including the distribution channels, business and investment infrastructure, of Atlantic, Montage and Palmer Square.
The fund will primarily target talented emerging hedge fund managers with existing track records or experienced investment professionals spinning out of investment banks and established hedge funds to launch new funds.
The fund anticipates investing primarily in strategies that are uncorrelated to traditional stocks and bonds and do not rely on the extensive use of leverage or illiquid investments to generate returns.
With a large institutional fund and ultra high net worth family as its anchor, the fund held its first close last month.
Chris Long, managing director of Palmer Square, says: “We are delighted to form this joint venture with Atlantic and Montage. Due to the dislocation that occurred in 2008 and the increased regulation on Wall Street, we continue to see many talented investment managers that have departed investment banks and hedge funds trying to attract their initial large investor. This is a great opportunity for us to not only apply our fund of fund management and risk control oversight capabilities, but also leverage our network and expertise in evaluating and investing in hedge funds.”
Atlantic’s managing director Don Trotter adds: “This partnership is an extension of the seeding and investment management development business that Atlantic began in 1992. Since then, within Atlantic and with affiliates, we have been instrumental in the successful seeding, asset growth and development of many investment management strategies, investment management firms, and hedge funds. We have achieved success by partnering with top managers and providing the necessary services and access to institutional markets to help them achieve the critical mass necessary to prosper.”
