G Squared Group Asset Management has teamed up with hedge fund services provider VanthedgePoint Group LL by purchasing a 10% minority stake and is launching a fund of hedge fund comprised solely of its emerging manager clients.
“By partnering with VanthedgePoint our idea is to greatly reduce the number one risk regarding investments in emerging managers: operational risk,” said Gualtiero Giori, managing partner of G Squared. The new vehicle, White Hill Fund, will invest exclusively in early-stage emerging hedge fund clients of VanthedgePoint Securities, the broker/dealer arm of VanthedgePoint Group. The fund will commence operations on May 1.
VanthedgePoint serves as a prime broker dealer, providing stock trading clearance and loans to small to midsize long/short equity hedge funds, with assets of over $1 billion, launching a fund of emerging hedge funds makes sense because larger pension funds typically have restrictions on investing more than 10% of their capital in any one fund.
"This allows us to offer our clients not only the potential outperformance typically demonstrated by emerging managers, but also a structure whereby they can track new talent while avoiding concentration risk and minimizing non-investment due-diligence work." said Giori.
26 Apr 2007
New Jersey To Invest in Hedge Funds of Funds
According to a due diligence memorandum presented to the New Jersey State Investment Council by director William Clark, NJ has a proposed $100 million investment in each of two Blackstone funds of funds strategies, Pacific Opportunities Strategy and an Emerging Markets Strategy to handle new hedge fund and private equity allocations.
The NJ pension system is also aiming at allocating a total of $625 million to two funds of hedge funds and three single-strategy managers, and a total of $325 million to four private equity funds, according to a due diligence memo penned by director William Clark to the system’s investment council.
Also in the investment proposal, NJ is looking to make a $150 million commitment to a fund of funds to be managed by Protégé Partners, the New York-based firm currently manages $2.2 billion and invests in smaller, niche funds and also seeds managers. The pension system is also allocating $150 million to Farallon Capital Institutional Partners, a multi-strategy fund, and $50 million to Omega Overseas Partners Ltd Class B, a long/short equity fund.
New Jersey’s proposed direct investments in single-strategy managers include a $75 million commitment to the Ascend Partners Fund II, which is a 1.5x levered version of the firm’s fundamental equity long/short strategy.
In private equity, NJ is making a $100 million commitment to Avenue Special Situations Fund V and a $50 million commitment to KPS Special Situations Fund III. Both funds focus on U.S. stressed and distressed opportunities. Finally, a $100 million commitment is being made to MatlinPatterson Global Opportunities Partners, a global distressed fund, and a $75 million commitment to Thomas H. Lee Equity Partners VI, a growth-oriented buyout fund.
The NJ pension system is also aiming at allocating a total of $625 million to two funds of hedge funds and three single-strategy managers, and a total of $325 million to four private equity funds, according to a due diligence memo penned by director William Clark to the system’s investment council.
Also in the investment proposal, NJ is looking to make a $150 million commitment to a fund of funds to be managed by Protégé Partners, the New York-based firm currently manages $2.2 billion and invests in smaller, niche funds and also seeds managers. The pension system is also allocating $150 million to Farallon Capital Institutional Partners, a multi-strategy fund, and $50 million to Omega Overseas Partners Ltd Class B, a long/short equity fund.
New Jersey’s proposed direct investments in single-strategy managers include a $75 million commitment to the Ascend Partners Fund II, which is a 1.5x levered version of the firm’s fundamental equity long/short strategy.
In private equity, NJ is making a $100 million commitment to Avenue Special Situations Fund V and a $50 million commitment to KPS Special Situations Fund III. Both funds focus on U.S. stressed and distressed opportunities. Finally, a $100 million commitment is being made to MatlinPatterson Global Opportunities Partners, a global distressed fund, and a $75 million commitment to Thomas H. Lee Equity Partners VI, a growth-oriented buyout fund.
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