SAIL Seeks 'Liquidity Premium' From Illiquid Hedge Funds

Oct 12 2010 | 1:09pm ET

Fund of hedge funds firm SAIL Advisors plans to invest more of its assets in less liquid hedge fund strategies, and may dip its toes into the hedge fund secondary market.

The Hong Kong-based firm said it will consider hedge funds with lockups of up to two years for its US$1.2 billion Flagship Fund, Bloomberg News reports. The firm is also looking at the secondary market, hoping to snap up attractive investments at a sizeable discount.

"There are some assets, some opportunities out there that are just very attractive, but people don't have the appetite to go after that," CEO Vincent Duhamel told Bloomberg. "We have capital that is very long term. We can earn a liquidity premium because we're willing to commit longer term."

As for stakes available on the secondary market, Duhamel pointed to funds with redemption restrictions and side-pockets.

"Sometimes there are some pretty good assets behind that," he said. "It's just a question that it's going to take more time before you can achieve higher returns."

SAIL's move towards less-liquid funds comes as it seeks to differentiate its Flagship from the US$557 million Topaz Fund it took over from ING Groep earlier this year. Topaz features monthly liquidity, as opposed to quarterly for Flagship, making it harder for the former to invest in illiquid funds.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...