Geneva Partners is looking to earn some sway with a few sought-after companies through some of the industry’s biggest activist hedge funds. The firm, based in the Swiss city that is its namesake, this month launched the Global Activist Fund, fund of hedge funds, with $50 million in assets.
The Cayman Islands-based fund will allocate 75% of its portfolio to a who’s who list of activist hedge funds, with the remaining balance in a three-times levered portable alpha strategy based on a basket of publicly traded holding companies that employ activist investment strategies. Some notable underlying activist managers in the fund’s portfolio include Pershing Square, Third Point and Icahn Partners, with Berkshire Hathaway on the stock selection side. The fund is currently invested in 15 to 20 underlying managers and some 20 underlying holding companies.
“The purpose of the fund is to provide clients with complete and diverse exposure to activism,” said Antoine Blouin, Geneva’s head of institutional business development. “We want to achieve diversification in the portfolio so we have some managers who specialize in the U.S. and some in Europe. We also have some hedge funds specializing in the Japanese market. We also select stocks, or holdings companies headed by activists such as Berkshire Hathaway.”
Blouin added that the current portfolio has a slight European bias in terms of stock selections because most European activists operate through holding companies, but this is offset by being overweight in U.S. hedge funds on the fund side.
He said that the acceptance of activism as a viable hedge fund strategy by investors is a key reason that the firm is entering the activist space.
“We’re deeply convinced that activism is something really interesting having become a real investment diversification within portfolios,” he said. “This was not the case a few years ago when activists were called corporate raiders and had a very bad reputation. They have very good reputations now because it has been demonstrated that they improve corporate governance, so from this point of view it is very interesting for us. The current economic environment is a benign background for activism.””
The fund is looking to provide its investors with 15% to 20% annual returns with a maximum annualized volatility of 10%. It charges 1.5% for management and 10% for performance, with a minimum investment requirement of US$100,000 or €100,000.
Franck Berlamont, a former partner at Banque Marcuard Cook & Co., founded Geneva Partners in 2002 following the sale of Banque Marcuard Cook to Anglo Irish Bank.
The firm currently manages some US$350 million in total assets.