LDV Capital Management is prepping its maiden hedge fund offering, Three Rivers Activist Fund, for launch sometime within the next few months. The Pittsburgh-based firm hopes to attract commitments of $50 million to deploy within the small-cap space.
The fund will invest in the equity and equity-related instruments of listed U.S. companies with market capitalizations of between $120 million and $250 million. It will acquire significant minority equity stakes—typically between 5% and 15%—in target companies within the basic materials, energy, industrial goods and conglomerates sectors.
The fund’s portfolio manager, Lodovico de Visconti, uses a value-driven approach in the selection of companies that are undervalued based on their fundamentals. He is currently reviewing over 15 potential target companies to invest and plans to narrow the list down to three to five companies for the fund’s portfolio. The typical holding period of the fund will range between six to over 12 months.
Visconti explained that he’s keeping the portfolio concentrated because he wanted to be nimble enough to “pick and choose” the types of companies that he can apply a “hands-on approach” to.
“We’re looking for underleveraged, undercapitalized, undervalued and overlooked companies,” he said.
Three River’s minimum initial investment is $1 million and subsequent incremental investment minimums are $500,000. It charges a 1.25% management fee and a 20% incentive fee.