Former ABN Vets Launching Fund Of Hedge Funds

Apr 24 2007 | 9:46am ET

Newly-formed fund of funds shop SilverStreet Capital is kicking off its fund management business in style. The London-based firm, which received FSA approval this month, has already been awarded a mandate of over $500 million from a European institution. It is also looking to launch its own fund of funds sometime this summer.
 
ABN AMRO’s Asset Management alumni Gary Vaughan-Smith and Alex Da Costa founded SilverStreet to manage institutional hedge fund assets. The pair played a key role in developing ABN AMRO’s alternatives business—Vaughan-Smith headed the team and grew the group’s assets under management from under $50 million when he joined in 2001 to a multi-billion business when the duo left in the summer of 2006, while Da Costa served as the group’s head of portfolio construction.
 
“A lot of European institutional investors are allocating substantial sums to hedge funds,” said Vaughan-Smith. “Event driven strategies are popular at the moment and there are a lot of opportunities in that space. Corporates with very strong balance sheets are able to buy other companies, buy back shares or go through management buyouts and the activists are helping drive these events.”
 
Silverstreet’s global multi-strategy mandate will allow the firm to invest in 25 to 30 underlying managers across all hedge fund strategies. The mandate will also be invested in managed futures funds employing medium-and-short-term trading strategies.

“We’ve always had good knowledge of emerging markets like Asia and Latin America so we’ll have exposure there,” said Vaughan-Smith. 

The duo is also planning to launch its own global multi-strategy fund of funds product this summer. Vaughan-Smith said the firm’s own portfolio may overlap that of its mandate but will contain fewer managers. He added that details on the fund of funds, such as fee structure and its name, have not been ironed out yet.

The pair is currently building up its team and expects to add 10 more personnel including analysts and client services personnel.


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