Fund selectors will often insist they need to meet the manager, know the company and test the record. For managing partner Fraser McKenzie (pictured), that is not enough. Zurich-based 47 Degrees North first came to public notice in the high octane pre-crisis world of 2007, when as a small asset manager it beat off 97 other contenders to win an emerging markets mandate from CalPERS, the California Public Employment Retirement System.We find the smaller funds give better returns and risk transparency
This was the start of a long relationship which continues with CalPERS holding a minority interest in 47 Degrees North Capital Management and being a significant investor in its funds.
Other associations built on that strong start. In 2009, the firm teamed up with the London-based private investment house of the Guinness family, known for its brewing business, and chaired by Edward Guinness, the Earl of Iveagh.That connection also remains, with 47 Degrees North advising on the Iveagh Wealth absolute return funds.The firm continues to break new ground in the asset management business with funds offering access to early-stage managers, innovative strategies and thematic hedge fund investments.
The full article is on :
http://www.investmenteurope.net/investment-europe/feature/2092826/47-degrees-north-innovation-style-process-structure
Jul 21, 2011
Anthony Scaramucci, founder of preeminent hedge fund seeding and incubation firm SkyBridge Capital, spoke with HedgeFund.net about his idea of the tremendous opportunity that exists in emerging hedge fund managers
Q: I have not heard that argument made, it’s certainly out of the box. Let me bring it back to the hedge fund. Your firm focuses on emerging managers. What would you consider to be an emerging manager? The definition has been fluctuating. As a follow up to that, what makes 2010 the best time to get into emerging managers?
A: The test is always 18-24 months after, when you do the look back and say, “Hey that was a good time.” But look, when I started this business I thought it was a good time, but the look back proves that it wasn’t. We were in a very late-stage market and we were in too much foam and too much froth there was too much leverage in the entire system. In the look back, I was wrong. Sitting here in 2010, markets have delevered, banks are shoring up their balance sheets, real estate is starting to move and starting to transact.
We are in a cyclical economy and we have to accept that. For myself I think we are in a better situation for emerging managers. If 2006 was late stage, 2010 midpoint, we’re sort of early stage and here’s what’s going on:
Prop traders and prop trading groups are being shut down at banks. Large hedge funds have slimmed up their personnel either due to asset position or just trying to create a leaner organization. The result is we have a ton of talent on Wall Street, in commercial banks, investment banks, and other hedge funds, that is now migrating on the street. Many of those people are going to say “If not now, when?” And they’re going to go start their own businesses.
I like to say SkyBridge has a “SkyBridge Inside” product . . . sort of the way Intel branded itself with the saying “Intel is inside.”
We can provide cloud computing, or application service providing, or paychecks, or ADP on payroll and having people off balance sheet their payroll department to one of those firms. SkyBridge can do that for the smaller hedge funds.
http://pragcap.com/an-interview-with-a-hedge-fund-insider
A: The test is always 18-24 months after, when you do the look back and say, “Hey that was a good time.” But look, when I started this business I thought it was a good time, but the look back proves that it wasn’t. We were in a very late-stage market and we were in too much foam and too much froth there was too much leverage in the entire system. In the look back, I was wrong. Sitting here in 2010, markets have delevered, banks are shoring up their balance sheets, real estate is starting to move and starting to transact.
We are in a cyclical economy and we have to accept that. For myself I think we are in a better situation for emerging managers. If 2006 was late stage, 2010 midpoint, we’re sort of early stage and here’s what’s going on:
Prop traders and prop trading groups are being shut down at banks. Large hedge funds have slimmed up their personnel either due to asset position or just trying to create a leaner organization. The result is we have a ton of talent on Wall Street, in commercial banks, investment banks, and other hedge funds, that is now migrating on the street. Many of those people are going to say “If not now, when?” And they’re going to go start their own businesses.
I like to say SkyBridge has a “SkyBridge Inside” product . . . sort of the way Intel branded itself with the saying “Intel is inside.”
We can provide cloud computing, or application service providing, or paychecks, or ADP on payroll and having people off balance sheet their payroll department to one of those firms. SkyBridge can do that for the smaller hedge funds.
http://pragcap.com/an-interview-with-a-hedge-fund-insider
Big Investors go for Big Hedge Fund Names: But There’s Hope for Emerging Managers
http://www.hedgetracker.com/article/Big-Investors-go-for-Big-Hedge-Fund-Names-But-Theres-Hope-for-Emerging-Managers
An alternative investment survey of 600 institutional investors that was conducted by Deutsche Bank reported that the number of institutions that provide seed capital to new hedge funds dropped from 20% to 17% over the past year. According to an article from the Financial Times, the decrease could be attributed to the rolling impacts caused by the collapse of Lehman Brothers. Accordingly, big banks are more focused on their core businesses and are less willing to take a risk with new hedge fund start-ups. Chief Operating Officer of FRM Capital Advisors, Patric de Gentile-Williams, said that in the recent past many “investment banks were involved in seeding as an adjunct platform”; but 2010 showed that this is no longer the case.
What’s causing the pull-back? The Financial Times says it could have something to do with the Presidents’ proposal to “limit deposit-taking banks from proprietary trading,” which would bar banks from owning hedge funds. Also according to the Financial Times, institutional investors and banks are favoring big names with proven track records.
What should emerging hedge fund managers do? Senior manager at Thames River Capital, Ken Kinsey-Quick, advises new managers to invest their own money into their hedge fund, as this demonstrates their commitment and belief in their strategies. Mr. Kinsey-Quick is head of Thames River Capital’s Warrior Fund, which provides seed funding to emerging managers.
An alternative investment survey of 600 institutional investors that was conducted by Deutsche Bank reported that the number of institutions that provide seed capital to new hedge funds dropped from 20% to 17% over the past year. According to an article from the Financial Times, the decrease could be attributed to the rolling impacts caused by the collapse of Lehman Brothers. Accordingly, big banks are more focused on their core businesses and are less willing to take a risk with new hedge fund start-ups. Chief Operating Officer of FRM Capital Advisors, Patric de Gentile-Williams, said that in the recent past many “investment banks were involved in seeding as an adjunct platform”; but 2010 showed that this is no longer the case.
What’s causing the pull-back? The Financial Times says it could have something to do with the Presidents’ proposal to “limit deposit-taking banks from proprietary trading,” which would bar banks from owning hedge funds. Also according to the Financial Times, institutional investors and banks are favoring big names with proven track records.
What should emerging hedge fund managers do? Senior manager at Thames River Capital, Ken Kinsey-Quick, advises new managers to invest their own money into their hedge fund, as this demonstrates their commitment and belief in their strategies. Mr. Kinsey-Quick is head of Thames River Capital’s Warrior Fund, which provides seed funding to emerging managers.
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