Dutch hedge fund start-ups sense the wind is turning in their favour as institutional investors in the Netherlands appear more prepared to back home-grown talent than in the past, followin
Dutch hedge fund start-ups sense the wind is turning in their favour as institutional investors in the Netherlands appear more prepared to back home-grown talent than in the past, following growing domestic criticism of the export of pension capital.
‘We are seeing the beginning of more interest from Dutch institutional investors in the hedge fund talent pool that exists in the Netherlands, because they increasingly realise that we need to strengthen the financial industry at home, rather than in London or New York,’ says Rob van Kuijk, chief executive of funds of hedge funds manager Finles Capital Management.
Van Kuijk was hosting a recent seminar organised by Finles in Utrecht to introduce Dutch hedge fund manager start-ups to institutional investors. The Dutch pension funds market is the second largest in Europe after the UK with some EUR1trn in assets, including pensions money held by insurance companies, and some of the country’s funds are among the biggest in the world. But Dutch pension funds invest most of their capital with investment managers outside the Netherlands.
‘There are roughly 10,000 hedge funds worldwide and only about 20 single hedge fund managers in the Netherlands,’ says Clayton Heijman, the Alternative Investment Management Association council member for the Netherlands and chairman of the supervisory board for Finles’ funds.
He told the seminar: ‘This position is likely to change in 2008, as it could be an opportune time to start your own hedge fund here. Starting up in challenging times provides the best foundation for future growth.’
Frits Fiene, manager of West Friesland-based hedge fund WorldView, said the innate conservatism of Dutch institutions in playing safe by investing with big names made it very difficult for hedge fund start-ups to raise capital in the Netherlands.
Fiene ran one of the best-performing global equity hedge funds between 2001 and 2006 and a macro fund from January 2003 to June 2005 before withdrawing from the market. He relaunched a global equity fund in 2007 and is in the process of launching a new global macro fund focused mainly on investments in highly liquid global currency markets and other macro themes.
Bas van Rhijn and his partners started up Amsterdam-based hedge fund manager Greenbay Investments with their own money and capital from friends and contacts. The firm invests in sustainable companies with good fundamentals and sells non-sustainable companies with poor fundamentals.
‘You see more and more studies which show that sustainable companies do better over the long term, because management has a driving philosophy to create value within the firm,’ Van Rhijn told seminar participants.
Leen den Hollander, managing partner at TradeWind Capital in Amsterdam, agreed that it was difficult to attract seed capital from Dutch institutional investors, but argued that the situation was changing as awareness grows of the deep vein of investment talent available in the Netherlands.
TradeWind Capital is a USD30m top-down long/short equity manager with a focus on Eastern European and Benelux stocks due to its in-house expertise and network of contacts. Since starting up last September, the manager has outperformed the MSCI Europe equities index by 13 per cent, despite the volatility in the equity markets created by the credit crunch.
Utrecht-based Finles Capital Management manages a family of funds of hedge funds with combined assets exceeding USD350m on behalf of institutional, private wealth management and retail clients, and was the first firm to offer a performance fee-only fund of hedge funds in the Netherlands.
