Arque & Co. Launches Smaller, Early-Stage Fund Of Hedge Funds

Mar 30 2007 | 11:24am ET

International wealth management firm Arque & Co. has recently launched the Arque Constellation Fund, a multi-strategy fund of funds. In its first two months of trading the fund of funds has returned 2.14% net of fees, and is managing some $5 million in assets.

Arque invests in smaller and early-stage investment funds, believing that emerging managers generate better returns than larger, more established funds. The new offering is currently invested in eight U.S.-based managers with strategies ranging from long/short equity to macro and distressed. The number of underlying managers can range from eight to 15, according to fund documents.

“It’s a SESI fund so we do not incubate or seed and we won’t look at anything under $25 million in AUM or greater than $1 billion,” said portfolio manager Heather Balke, who co-manages the portfolio with David Bullock. “And we won’t look at anyone with less than a six-month track record.”

The Arque Fund charges a 60 basis point management fee, and employs a 10% incentive fee 3c1 structure.

Arque is headed by Michael Ning, a former investment banker with Wedbush Morgan. The firm offers access to hedge funds, fund of hedge funds, long-only products, structured products and other alternative investment products to its clients. It has offices in California and New York and recently expanded its presence with the acquisition of Japanese wealth management firm Avalon Shonan Securities.

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