Robeco Group and VCM Fund Management are getting into the hedge fund seeding business. This month the two firms formed a new London-based emerging hedge fund platform, with Robeco providing international distribution capabilities and seed capital to promote emerging portfolio managers and VCM FM bringing its risk control, compliance, operations and legal support to bear in the new venture.
The platform is expected to add up to four new hedge funds per year over a range of strategies, each likely receiving seed funding of between $10 million to $25 million. The emerging managers will be seeded from the Robeco VCM Emerging Managers Fund, a Luxembourg based SICAV, which will act as a fund of funds.
“Initially we’re going to be more conservative in our choices but we don’t have any constraints, so ultimately we’ll offer a broader spectrum of funds that fit in with our existing portfolio,” said Charles Eddis, VCM’s head of legal and compliance. And it doesn’t get much more conservative than a U.S. equity long/short fund, which the platform hopes to launch within the next three months with more than $10 million.
Eddis said managers seeded by the platform will likely have five or six years industry experience but are either “constrained by the organizations they’re working for or they have wider ambitions.”
The platform’s funds will either fall under VCM’s existing umbrella vehicle, which is a Cayman Islands-based segregated portfolio company, or under another VCM master-feeder structure. But wherever they’re placed is where they’ll stay, because there are provisions in place aimed at preventing managers from spinning out on their own, according to Eddis.