New Firm Offers No-Performance-Fee, Separately-Managed Hedge Fund

Jan 19 2011 | 6:02am ET

A pair of European banking veterans is taking a page from the mutual fund industry for their new hedge fund.

CedarBridge Capital will eschew performance fees and offer clients daily liquidity. The new firm also aims to take advantage of another client-friendly innovation, structuring third-party investments as separately-managed accounts, with assets held by custodians in the names of clients.

“We wanted to do something different from the management and performance fee model pursued by most hedge funds,” co-founder Atul Bajpai told Financial News. “A lot of investors grew disillusioned by the underperformance of hedge funds during the crisis, and issues such as leverage and gating, so there was a real gap for separately managed accounts offering hedge fund strategies and a fixed-fee model.”

Bajpai, formerly CEO of European corporate and investment banking at Wachovia, and co-founder Ajay Soni, formerly deputy chief investment officer at KBC Alternative Investment Management, have been managing their own money using the CedarBridge strategies since last year. The two will continue to manage those assets at CedarBridge, assuring their interests are “fully aligned with our clients’ interests,” Bajpai said.

The liquid long/short fund will invest in stocks, bonds, convertible bonds, exchange-traded funds, commodities and currencies, FN reports.

Before joining Wachovia, Bajpai was global head of principal finance and securitization at Dresdner Kleinwort Wasserstein. He left Wachovia after its acquisition by Wells Fargo. Soni previously worked at Merrill Lynch and Deutsche Bank.

CedarBridge has yet to officially launch. When it does, it will charge 2% for management.


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