Sunday, 28 August 2016
Last updated 1 day ago
Feb 10 2006 | 10:03pm ET
Verity Capital, a New York-based hedge fund firm, has recently launched its second fund, a long-short equity vehicle that will invest in U.S. stocks and American Depository Receipts. The firm is also revving up its marketing efforts with the aim of attracting institutional money.
The Verity Absolute Return Fund, which was launched in December, has $2.5 million in assets under management but has the capacity to take in up to $500 million, according to Dennis Shaya, co-founder and managing partner of Verity.
"I think we have a couple of distinguishing characteristics that appeal to the fund-of-funds market and the seeding market, as well as other family office-oriented institutions," said Shaya. "Our approach leverages a value-based method and concept called 'economic margin.'" He said that by utilizing this approach, which converts accounting data into meaningful economic insight, he is better able to link corporate performance to market value than if he used traditional quantitative metrics alone.
The new fund follows the January 2005 launch of the long-only Verity Opportunity Fund, which has $6.5 million in assets under management.
"We are very opportunistic from a size and style perspective…we basically go where the opportunities are in terms of capitalization and sector, and to some extent, geography," said Shaya, adding, "while we're currently overweight the U.S. market, we do apply our approach to identify selective international opportunities as well."
Shaya and Bill Bachrodt, co-founder and managing partner, both come from consulting backgrounds, which they believe gives them an edge when evaluating investment opportunities. "When we were consultants we were focused on the value drivers of companies," said Bachrodt. "[We] bring that knowledge to bear when we are trying to understand what is plausible with a particular company."
The minimum investment in each of Verity's funds is $100,000. There is no lockup period and the firm charges a 1% management fee and a 20% performance fee.