New fund of funds solicits hedgie virgins
The Adept Capital Early Stage Asia Fund launches in Hong Kong declaring a preference for young and fresh hedge fund managers.
A new boutique fund of funds, Adept Capital, has launched its first niche-oriented product named the Adept Capital Early Stage Asia Fund. It opened at the beginning of January with assets of $5 million.
The chief executive of the Hong Kong-based fund of funds is Eleni Istavridis, who has worked at McKinsey, Goldman Sachs and was head of global institutional services at Bankers Trust in Hong Kong.
The chief investment officer is Tony Smith, formerly of KE Absolute in Hong Kong, where he managed the KE Absolute Early Stage Asia Fund, and worked with Tom Ashworth, who is also a director of Adept Capital Partners.
The strategy is to go for hedge funds, although not necessarily individual hedge-fund managers, that are young and fresh. Even though it is handling exclusively new managers, this fund will not seed them nor seek any kind of revenue participation.
Adept is investing in hedge funds that have been operating for less than three years and with assets of less than $250 million, but those driven by managers with some hedging or shorting experience. Virgin hedge funds but not necessarily innocent ones, in other words.
ôNewer hedge fund managers are full of fresh ideas, are driven to succeed and their compensation isnÆt tied to bloated AUM,ö says Istavridis.
If an underlying hedge fund turns out to be a roaring success and its assets rocket past $500 million, then in line with its rationale, Adept will consider an orderly pullout of its investment and look to place the proceeds with another rookie manager. The core philosophy of new manager specialists is that hedge fund managers become big-headed, fat and lackadaisical about their performance once their fortune and legacy is secure.
The Adept portfolio will consist of 15 to 20 underlying individual hedge fund investments. Adept has already identified the first 15 managers that they wish to invest in.
The fund will be capped at $150 million and investments are being sought from institutions, sovereign wealth funds, pension funds and family offices. It targets annualised returns of 15%-20% on volatility of 8%-10%. Fees are 1.5% and 15%.
The fund will not employ leverage and redemptions are available on 60-days notice. Citi is the fund administrator, Maples Finance is custodian and Walkers the lawyers.
The chief executive of the Hong Kong-based fund of funds is Eleni Istavridis, who has worked at McKinsey, Goldman Sachs and was head of global institutional services at Bankers Trust in Hong Kong.
The chief investment officer is Tony Smith, formerly of KE Absolute in Hong Kong, where he managed the KE Absolute Early Stage Asia Fund, and worked with Tom Ashworth, who is also a director of Adept Capital Partners.
The strategy is to go for hedge funds, although not necessarily individual hedge-fund managers, that are young and fresh. Even though it is handling exclusively new managers, this fund will not seed them nor seek any kind of revenue participation.
Adept is investing in hedge funds that have been operating for less than three years and with assets of less than $250 million, but those driven by managers with some hedging or shorting experience. Virgin hedge funds but not necessarily innocent ones, in other words.
ôNewer hedge fund managers are full of fresh ideas, are driven to succeed and their compensation isnÆt tied to bloated AUM,ö says Istavridis.
If an underlying hedge fund turns out to be a roaring success and its assets rocket past $500 million, then in line with its rationale, Adept will consider an orderly pullout of its investment and look to place the proceeds with another rookie manager. The core philosophy of new manager specialists is that hedge fund managers become big-headed, fat and lackadaisical about their performance once their fortune and legacy is secure.
The Adept portfolio will consist of 15 to 20 underlying individual hedge fund investments. Adept has already identified the first 15 managers that they wish to invest in.
The fund will be capped at $150 million and investments are being sought from institutions, sovereign wealth funds, pension funds and family offices. It targets annualised returns of 15%-20% on volatility of 8%-10%. Fees are 1.5% and 15%.
The fund will not employ leverage and redemptions are available on 60-days notice. Citi is the fund administrator, Maples Finance is custodian and Walkers the lawyers.
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