ABR Capital Ditches Options, Launches Fund Of Hedge Funds

Oct 3 2007 | 11:16am ET

If Norwalk, Conn.-based ABR Capital has a different feel to it these days, that’s because it recently underwent a facelift and launched a fund of hedge funds. The former options trading shop ditched its core strategy in March in favor of a new multi-strategy vehicle.

“We felt our options strategy was not conducive to the market and we felt that we needed to change venues. We were able to create a product that is unique from other fund of funds,” said Alan Rosenthal, founder. “We’re invested in blue-chip funds with high assets such as a Renaissance or Citadel-type of funds allowing individuals to invest with a lower minimum than if they were to invest in those funds themselves.”

The $5 million ABR Capital fund currently invests in seven managers and is planning to add three to eight more, specifically U.S.-based ones that do not utilize leverage. Underlying funds in the portfolio also have some activist and private equity exposure in their portfolios, according to Rosenthal. The vehicle currently has one institutional investor, two trusts and some high net-worth individuals as its investor base.
 
Since inception, the fund of funds is up some 2.5%.

Rosenthal, a former options trader and medical doctor, labeled his fund as a “faith-based portfolio” in that a lot of the underlying funds are not transparent but have averaged returns of approximately 24% a year on a pro-forma basis over eight years.

“We’re very diversified in strategy and geographically and we’re hoping to weather any storms based on our diversification,” said Rosenthal, who added that he’s currently looking to partner up with a third-party marketer to aggressively raise assets for the fund.

ABR Capital fund charges fees of 1% for management and 10% for performance with a one-year lockup and a minimum investment requirement of $500,000.


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