Absolute Alpha shops in Big Apple
Absolute Alpha has acquired the flagship fund of a major New York-based pure hedge fund of fund manager and is negotiating to purchase the manager itself.
The Australian fund of hedge fund manager will not reveal the name of its newly acquired US fund, which it claims has an estimated US$500 million in funds under management (FUM), until negotiations for the acquisition of the parent company are completed.
However, Absolute Alpha (AA) head of distribution Peter Wood has confirmed the acquisition of the fund for an undisclosed figure, and that AA is in negotiations to buy the Securities and Exchange
Commission (SEC)-registered fund of fund manager.
“We’ve completed the first stage of our intended acquisition and hope to be able to complete the final stage over the next month, or very, very shortly, by acquiring a majority stake in the parent business,” he said.
The targeted fund of fund manager comprises 25 pure hedge funds (including AA’s newly acquired fund), which Woods claims have a combined FUM of US$1 billion.Its acquisition will bring AA’s combined FUM, including its Alpha Strategic Fund fund of fund offering in Australia, to an estimated $1.3 billion, he said.
One objective of the acquisition is to “capitalise on the existing infrastructure, people, technology and intellectual property that’s over there to enhance what we are able to deliver to our clients over here”.
“Our future acquisition is an SEC-registered investment adviser whose portfolio of hedge funds have not suffered a down year since the firm’s inception (17 years ago) and have consistently outperformed stock and bond markets.”
Following AA’s appointment to the flagship fund’s investment committee, an AA team spent a month in New York re-weighting the fund’s investment portfolio “into areas that we have traditionally invested in”, according to Wood.
“AA chief executive Shawn Richard and chief investment officer Eugene Liu are very comfortable with what they have done with the flagship product during their trip to New York,” he said.
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