Wednesday, 4 May 2016
Last updated 1 hour ago
Dec 1 2005 | 9:36pm ET
Glocap Partners has launched the Belstar Multi-Advisor Hedge fund, a multi-strategy offering that will invest equally with 10 different hedge fund managers, but charge only a single layer of fees. Kenneth Orr, managing partner at Glocap, a financial services firm focused on the placement of funds and the development of alternative investment products, said his firm created the offering as a result of investor demand.
"It was mainly driven by a number of European pension funds, one U.S. pension fund, and a number of family offices who were becoming more and more disenchanted with fund-of-funds fees," said Orr. "They didn't know why they were paying managers even though the funds were down."
The fund, which is be run by Daniel Yun, managing partner, charges a quarterly 2% management fee and 20% performance fee, and has a minimum investment of $1 million. Michael Tracy, senior vice president at Glocap, said an investor will only have to pay an incentive fee if the managers produce a net positive return. There is a lockup period of 90 days and no redemption penalty, and Belstar Investment Management is assuming all netting risk.
"The investor is 300 basis points better off with our fund than a traditional fund-of-funds," said Orr, referring to the money investors will save on fees.
The fund officially launched on Oct. 1 with $10 million of the partners' money, and will open up to outside money on Jan. 5. According to Tracy, there is no firm closing target, but the fund is able to take in $2-3 billion.