Absolute Fund Advisors Seeks Targets For Hedge Fund Allocations

Sep 8 2011 | 10:10am ET

New York-based hedge fund allocator Absolute Fund Advisors is currently invested in 18 new and emerging managers and General Partner Jason Konior says that total could reach 25 by year’s end.

Konior who, prior to launching AFA in 2006, owned and ran the retail division of KSH, a $1.2 billion bank, told FINalternatives AFA makes two types of allocations to hedge funds. The initial allocation, he says, is made on a first-loss basis.

“We provide 9-to-1 matching capital to them,” says Konior. “So, if they have $1 million, we provide $9 [million] and they run $10 [million]. They run that $10 million on our platform in a first-loss position, meaning all losses are absorbed by their million. Once the managers have proven themselves on the platform and we’re comfortable with their performance, obviously they’re making money, but more importantly, from a risk perspective, when we’re more comfortable with the strategy, [and] we will go ahead with a more traditional allocation…”

AFA, which currently runs about $220 million, has made two allocations this September—to Quidnet Capital, a global macro strategy, and Rockmore Capital, an equity long/short event-driven fund. Konior says AFA is being approached by many funds, and it has a marketing team that “goes after funds that fit certain criteria.”

The firm likes “liquid, listed equities, options, some futures—to the extent of the major indexes” and low-volatility. Konior says they focus on emerging managers because their allocation model appeals to emerging managers:

“The people who are most attracted to this model are ones that are seeking growth in AUM and institutional exposure,” he says. “A billion dollar fund is not going to need the AUM boost that we’re offering.”

In addition to the “AUM boost,” AFA offers managers institutional exposure via its platform and, provided they prove themselves through the first-loss model, Konior says AFA is quick to allocate traditional assets to their best managers.

While the firm will allocate to managers world-wide, Konior says it currently focusing on Europe and Asia.

“We’re always looking for talent,” he says.


In Depth

Hedge Fund Veteran Peter Borish Talks Trading

Dec 17 2014 | 9:32am ET

Peter Borish says 2014 was “tricky” from a trading perspective. “The best...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.