HEDGE FUND BACKERS

Investors Targeting Stakes in Hedge Fund Operators

Types of
Firms Dry
Sponsor Contact Targeted Powder? The Skinny
Affiliated Managers Jay Horgen Established Yes Publicly traded company buys minority stakes in hedge fund firms, as
Group 617-747-3300 well as traditional money managers. Backs 24 firms with combined
Prides Crossing, Mass. $470 billion under management, but hasn’t done a new hedge fund
deal in years. One of its oldest holdings, Essex Investment, bought out
AMG’s stake in late 2012. Still in the portfolio: blue-chip managers
such as AQR Capital, BlueMountain Capital and ValueAct Capital.
Aligned Asset David Minella Established Yes Launched in 2011 with $200 million commitment from private equity
Managers 203-504-3210 firm GTCR. Takes majority stakes in large asset managers, including
Stamford, Conn. hedge fund shops. Only deal so far is with real estate investor
Townsend Group. Founder David Minella best known as former CEO of
Value Asset Management. Hired former Artio Global executive Barney
Walker to market firms that Aligned backs.
Alpha Strategic Nicola Howe Established Yes Public company launched in 2005 to buy minority stakes or revenue
London 44-20-7222-3005 shares in management firms, as well as individual funds. Has done two
deals: Winton Capital in 2006 and Ikos Asset Management in 2009, but
severed ties with Ikos in July. Actively scouting new deals worldwide.
Former Asset Management Finance advisor Alistair McKay joined last
year as chief executive. Northill Capital took 51% stake in Alpha
Strategic in 2011 and last month offered to buy the rest.
Ascalon Capital Chuak Chan Startup and Yes Westpac Banking unit uses balance-sheet capital to buy minority
Sydney 852-3961-0828 Emerging stakes in managers running $50 million to $200 million, and sometimes
more. Seeks long-term relationships, typically investing $30 million to
$50 million per deal. Has seven investments, including deal inked in
March to take 30% stake in Singapore-based RV Capital. Currently
working on two deals in Australia. Chuak Chan, who joined in 2011 to
expand Ascalon’s business in Asia, became chief executive last
December.
Asset Management Sam Schwartz Established No Credit Suisse, which owns 83% of the firm and funded its deals with
Finance 212-325-5151 proprietary capital, began unwinding the operation last year. Exit
New York strategy remains a mystery, however. Although Credit Suisse made
past attempts to shop AMF’s portfolio, the bank says it’s not now for
sale. AMF holds minority stakes in about 20 firms, both alternative and
traditional asset managers. They include Brigade Capital, FX Concepts,
Lucidous Capital, Reservoir Capital and Tricadia Holdings.
Blackstone Logan Pritchard Startup and Yes Biggest player in the hedge fund-seeding field has deployed $1.8
New York 212-390-2757 Established billion from a 2011-vintage vehicle that has $2.4 billion overall. Most
recently backed Princeton Alpha Management with $250 million and
invested $150 million with a London firm led by Eton Park Capital
alumnus Robert Dafforn — swelling portfolio to 11 deals and counting.
Meanwhile, has raised at least $500 million for a separate vehicle that
invests in large, established hedge fund firms. Aims to raise $2 billion
to $3 billion for that strategy.

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October 2, 2013 Hedge Fund 2
ALERT

HEDGE FUND BACKERS

Types of
Firms Dry
Sponsor Contact Targeted Powder? The Skinny
Dyal Capital Michael Rees Established Yes Neuberger Berman unit is most active player among backers of
New York 212-476-9021 established management firms, having bought stakes of about 20%
apiece in eight businesses since December 2011. Has deployed about
75% of its $1.3 billion debut fund and is now marketing a follow-up
vehicle with a $1.5 billion fund-raising goal. Most recently bought a
stake in Waterfall Asset Management from seeder M.D. Sass. Other
portfolio companies include Capital Fund Management, Halcyon Asset
Management and MKP Capital.
Foundation Capital Tom Ward Established No Trying to raise capital for a private equity vehicle that would take
Greenwich, Conn. 203-622-1999 stakes in fund operators with at least $5 billion under management.
Had told market players it closed on $2.3 billion of commitments in
June 2013, but subsequently acknowledged that it has yet to hold a
first close. Has lined up one investor willing to commit up to $1 billion
for co-investment opportunities. In 2011, reached tentative agreement
to buy a stake in Israel Englander’s Millennium Management, but the
deal never closed. Has yet to make an investment. Led by Dean Barr,
who previously headed an alternative-investment unit at Citigroup.
FRM Capital Patric Startup Yes Now a unit of Man Group, can redeploy capital from a $400 million
London de Gentile-Williams “evergreen” fund that launched in 2007. Recent deals include a $25
44-207-144-2818 million investment in machine-learning manager CommEq and a
planned $100 million commitment to former Credit Suisse quant trader
Mika Toikka. Also still working with Deutsche Bank on a seeding joint
venture called dbalternatives Discovery Fund, but has yet to hold first
close. Plan is to invest $50 million to $100 million per deal in exchange
for a revenue cut.
Goldman Sachs Ali Raissi Startup and Yes Continues to deploy capital from 2011-vintage seeding vehicle that set
New York 44-207-774-1000 Established out to raise $1 billion but held its final close with $650 million. Recently
backed West Road Capital with $50 million. In at least one recent deal,
agreed to a 10% revenue share, instead of the standard 20% take.
Meanwhile, has begun talking to investors about a follow-up to its
Petershill Fund, which launched in 2007 to buy stakes in large hedge
fund managers. Original fund deployed only about 60% of its capital.
While profitable, Petershill has backed several firms that went bust.
Grosvenor Capital Jonathan Levin Startup and Yes Fund-of-funds giant early this year held final close with $475 million of
Chicago 312-506-6647 Emerging pledges for its debut seeding fund. Has three deals so far, with
Continuum Investment, Engaged Capital and Nightscape Capital.
Continuum launched in February with $85 million of seed capital.
Grosvenor expects to make a total of 5-7 investments of $50 million to
$100 million apiece.
Harvest Funds Eli Kent Startup and Yes Continues to market debut seeding vehicle, which held first close in
Management 781-639-7054 Emerging July 2012 with at least $20 million. Also draws backing from a group of
Marblehead, Mass. investors on a deal-by-deal basis. Deploys $30 million to $50 million
per deal. So far has bought stake in London real estate shop Clearance
Capital and seeded energy-focused fund managed by Ecofin.
Separately, parent Moody Aldrich Partners seeded small-cap specialist
Eastern Shore Capital.
Horton Point Dimitri Sogoloff Startup and Yes After raising an undisclosed amount in initial fund-raising push early
New York 212-939-7300 Emerging this year, looking to invest perhaps $10 million per manager in
exchange for a revenue cut. Only invests in systematic traders, who
must use Horton Point’s infrastructure. Has backed seven startups so
far. Will consider acceleration deals. Sogoloff co-founded Alexandra
Investment, a once-$2 billion hedge fund shop that shut down amid the
financial crisis.

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October 2, 2013 Hedge Fund 3
ALERT

HEDGE FUND BACKERS

Types of
Firms Dry
Sponsor Contact Targeted Powder? The Skinny
IMQubator Jeroen Tielman Startup and Yes Backed by Dutch pension giant APG, has invested about $25 million per
Amsterdam 31-62-937-9265 Emerging manager in 11 deals. So far has focused on startups, but is looking to
do more acceleration deals. A recent investment with an emerging
manager, True Partner Fund of Hong Kong, lifted that firm’s assets to
$107 million. Plans to recycle capital as it exits positions, but it’s
unclear how much dry powder it has. Expects to complete two more
deals in late 2013 and early 2014.
Investcorp Nick Vamvakas Startup and Yes Re-launched seeding business in 2012 after sitting on the sidelines
New York 917-332-5700 Emerging during and after the financial crisis. Since then, has invested $50
million of seed capital with Kingsguard Advisors. Also backed Kortright
Capital with $50 million in its first acceleration deal. Largely invests
balance-sheet capital, but is seeking co-investors. Deployed $450
million to startup fund operators in 2005-2008.
Larch Lane Advisors Mark Jurish Startup No Has been trying to raise $1 billion to $1.5 billion for its first solo
Rye Brook, N.Y. 914-798-7600 seeding vehicle in years. But after a year in the market, has yet to close
on any commitments. Continues to manage a $400 million joint-venture
seeding fund it launched with PineBridge Investments in 2008. Has
been seeding hedge fund managers since 2001, with 26 deals to its
credit.
Lily Pond Capital Harlan Simon Startup and Yes New player formed this year when global-macro investor Howard Kurz
New York 646-572-4600 Emerging transformed his shop into a seeding business. Raised an unknown
amount of capital for a fund that will take stakes in management firms
and provide marketing and operational support. Has backed a couple of
firms so far, including New York-based AlphaParity, led by two Tudor
Investment alumni.
Mariner Investment Brendan Minogue Startup and Yes Struck deal with Alaska Permanent Fund in 2012 under which it will
Harrison, N.Y. 212-880-9247 Emerging deploy $500 million to back a dozen new managers, with the idea of
incubating them and then spinning off the most successful ones.
Separately, has invested client capital in Robert Heine’s Morven
Advisors, which launched this year, and has done a number of
acceleration deals. Mariner has long backed spinoffs by its own
portfolio managers, including Caspian Capital, Pembrook Capital and
Tricadia Capital.
M.D. Sass Phil Sivin Startup Yes Soliciting capital for second seeding vehicle, which will back hedge
New York 212-843-8944 fund teams and other types of asset managers. Founders Marty Sass
and Hugh Lamle also scouting for startups to back with their own
money, now that they’re winding down a seeding business in
partnership with Macquarie Group. The joint venture is down to just
four holdings, having recently sold a stake in Waterfall Asset
Management to Dyal Capital.
Maverick Capital Bates Brown Startup and Yes Set aside $100 million of proprietary capital in 2011 for its first seeding
Dallas 212-418-6958 Emerging vehicle. Invests perhaps $20 million per deal, either for a minority
stake or a cut of revenue. Has closed three deals so far, with Sentinel
Rock Partners, Rinehart Capital and Sycamore Lane Partners. Once it
has a track record to show for those deals, Maverick plans to raise
capital for a commingled seeding vehicle. Bates Brown, who oversees
the firm’s $1.3 billion fund-of-funds unit, also runs the seeding
business.
Meritage Group Nathaniel Simons Startup Yes Led by Nathaniel Simons, son of Renaissance Technologies founder
San Francisco 415-399-5330 James Simons, the $8 billion firm mainly runs funds of hedge funds on
behalf of Renaissance employees. Has done at least three seed deals
over the years. Most recently it backed the August launch of Sarissa
Capital. Invested $150 million in Lamond Capital last year and sunk as
much as $300 million into Hutchin Hill Capital, which launched in 2008.

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October 2, 2013 Hedge Fund 4
ALERT

HEDGE FUND BACKERS

Types of
Firms Dry
Sponsor Contact Targeted Powder? The Skinny
NewAlpha Asset Antoine Rolland Startup and Yes Unit of OFI Asset Management is merging with long-only seed platform
Management 33-6-80-17-68-88 Emerging Next Asset Management, a unit of Paris-based Groupe La Francaise.
Paris NewAlpha has a $420 million war chest for seed investments, including
a $50 million joint venture with Asia-focused Woori Absolute Partners
that is likely to ink a second deal before yearend. Separately plans to
raise $400 million for a fund that would only back long-only managers
in France. Also has sights set on global seeding vehicle. Most recently
backed London-based LindenGrove Capital in January.
Northern Lights Michael Daley Emerging Yes Joint venture with Hermes BPK Partners completed second deal last
Capital 206-965-8878 month, investing an undisclosed amount of acceleration capital with
Seattle equity manager Altalis Capital of New York. Made first investment in
March, backing Taurasi Capital of New York. Joint venture raised an
initial $250 million from a large European institution believed to be BT
Pension Scheme, which owns Hermes BPK. Shooting to raise $750
million overall. Invests $50 million to $75 million per deal with fund
shops running up to $75 million. Targets managers with low correlation
to traditional investments.
Northill Capital Ryan Sinnott Startup and Yes Founded in 2010 by former BNY Mellon executive Jonathan Little with
London 44-20-7016-4119 Established backing from Italy’s Bertarelli family, which founded the Serono
pharmaceutical company. Has done five deals so far, taking stakes of
50-80% both in startups and established management firms looking to
cash out partners. Last year invested in insurance-focused manager
Securis Investment, and in 2011 backed global-macro manager
Wellfield Partners with $30 million. Launched Goldbridge Capital in
2011.
Orix Corp. Michael Kelly Established Yes Financial-services giant bought 60% stake in $10 billion U.S. fund shop
Tokyo 212-497-7871 Mariner Investment in 2010. Then bought 90% stake in Dutch manager
Robeco from Rabobank in July 2013. Now looking to acquire minority
stakes. Hired former FrontPoint Partners chief investment officer
Michael Kelly in 2012 to expand U.S. business. U.S. unit this year hired
former Asset Management Finance executive Sean Gallary and former
FrontPoint executives Anthony Baginski and Viorica Choski.
Paloma Partners Matthew Rothman Startup Yes Founded by Donald Sussman in 1989, $1.8 billion firm deploys capital
Greenwich, Conn. 203-861-8477 to wide range of strategies, but mainly backs quantitative managers.
Shops must agree to run money exclusively for Paloma for some years
before raising outside capital. Backed quantitative-equity manager
Ergoteles Capital in 2012 with about $150 million and Reef Road in
February with $300 million.
PineBridge Robert Discolo Startup No Former investment-management arm of AIG launched campaign more
Investments 646-857-8000 than a year ago to raise $500 million to $1 billion, but hasn’t raised any
New York capital so far. Meanwhile, is scouting managers it can bring to
investors on a deal-by-deal basis. Continues to run $400 million joint
venture with Larch Lane.
Protege Partners Mike Barron Startup Yes Makes seed investments of $50 million to $100 million in exchange for
New York 212-784-6321 cut of revenues. Runs $2.1 billion overall via multi-manager vehicles
that pursue seed deals and make traditional investments with smaller
firms. Has 40% allocation for seed investments, and must reallocate
capital to ink new deals. Most recent known seeds are Signpost
Capital, which launched in 2012, and Expedition Capital, which also
launched in 2012 and wound down in mid-2013 following losses.

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October 2, 2013 Hedge Fund 5
ALERT

HEDGE FUND BACKERS

Types of
Firms Dry
Sponsor Contact Targeted Powder? The Skinny
Pulse Capital Ibrahim Gharghour Startup and No Founded in 2011 by Investcorp alumni Gary Long, Thomas Middelhoff
New York 212-430-1860 Emerging and Ibrahim Gharghour. In first deal, raised $105 million to back August
launch of London statistical-arbitrage manager Sunofia Capital. Now
raising capital for up to seven acceleration deals. Also runs multi-
manager vehicle that invests in CTAs.
Q Investments Brandon Teague Startup Yes Since relaunching seeding business in 2010, has backed Spartan
Fort Worth, Texas 817-332-9500 Capital of Charlotte, North Yard Capital of New York and Gratia Capital
of Los Angeles. Primarily looks at long/short equity fund operators, but
open to debt and event-driven strategies. Runs some $1.75 billion in a
variety of strategies. Almost half of capital supplied by partners.
Reservoir Capital Elizabeth Flisser Startup Yes Has backed plenty of successful managers since the 1990s, including
New York Rosman Anchorage Capital, Glenhill Capital and Och-Ziff Capital. Last deals were
212-610-9000 in March, when it invested $217 million with former Goldman Sachs
executive Buckley Ratchford’s Wingspan Investment and backed London
startup Camares Capital. Occitan Capital, which secured an investment
from Reservoir in 2011, shut down in May because of losses.
Samena Asset Ramiz Hasan Startup and No Joint venture between Hong Kong-based Samena Capital and Geneva-
Managers 852-3583-6072 Emerging based Reyl & Cie. Winding down $74 million seeding vehicle but plans
Hong Kong to raise capital for a new one, with focus on managers who work or
invest in Asia. Current vehicle, Samena Angel Fund, last year exited
position in Chicago-based Phalanx Capital. Managing director Julius
Wang recently left the firm.
SEB Alternative Chris Rule Startup and Yes Formed in early 2012 when Swedish banking conglomerate SEB
Solutions 44-20-7246-5700 Established merged its Key Asset Management unit and fund-seeding business.
London Currently deploying capital from $300 million vehicle that finished fund
raising in 2011. Backs both new and established managers with
investments of $20 million to $50 million each.
Stride Capital Don Rogers Startup and Yes Inked first deal last year, investing $50 million with LRV Capital, led by
Stamford, Conn. 203-569-8920 Emerging a former Millgate Capital executive. Deployed second slug in March to
Barnstar Funds, headed by a former Fairholme Capital executive.
Looking to deploy $25 million to $50 million per deal, using capital from
a comingled seeding fund that it’s still marketing. Sometimes gets
contributions from co-investors.
TIG Advisors Spiros Maliagros Startup and No Aims to identify promising managers and then market them to
New York 212-396-8764 Emerging institutional investors on a deal-by-deal basis. Since launch a year ago
has yet to close a deal, but is in final capital-raising stage for at least
one manager. Looking to deploy about $75 million per deal, with a
focus on providing acceleration capital to managers with $100 million
to $500 million of assets. Has long invested in fund operators with its
own capital. Currently has investments in six fund shops with a
combined $1.4 billion under management.
Tiger Management Fraser Seitel Startup and Yes Seeding legend has backed about 40 firms that together run some $22
New York 212-984-2500 Emerging billion. Deals in the past year include Tiger Pacific Capital, led by former
Tiger Asia Management executives, and Marvin & Palmer Associates
affiliate MPA Capital. Launched Tiger Accelerator Fund in 2011 with $450
million, including $230 million of proprietary capital. That fund, which is
fully deployed to six Tiger seeds, was first time Julian Robertson’s firm
accepted outside capital in more than a decade.
Wolver Hill Asset Ed Rogers Startup and Yes Led by former Deutsche Bank prime-brokerage executive Ed Rogers,
Management 81-34-520-5580 Emerging who also advises fund-of-funds manager Rogers Investment. Aims to
Tokyo invest about $5 million per deal in funds in Asia. Two of its seeds,
Changjiang Absolute Return China Fund and Black Crane Capital, have
increased their assets from under $10 million to about $25 million.

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