Private Equity Consultant To Launch Hedge Fund Seeding Unit

Mar 27 2008 | 2:00am ET

3D Capital plans to add a hedge fund seeding unit within the next few months. However, this seeder will not market or help manage its underlying managers.

Marc Bodin, managing director, said the Zurich, Switzerland-based firm is making its foray into the hedge fund space one step at a time. He added that 3D may include marketing and operational in the future if the market warrants it and it is legally cleared to do so.

“We also have to look at it from a legal perspective if it is correct to provide marketing services together with the financing services,” said Bodin. “There should be a Chinese wall between out structuring/consulting work and the marketing work because we want to make sure there are no conflicts of interest.”

So why is 3D, a private equity consultant and investment firm traded on the Frankfurt Stock Exchange, looking to invest in hedge funds?

Bodin said the firm sees no difference between supporting a production company and a hedge fund, because, “whenever we’re convinced that we’ve found talent, then we’re of the opinion to support it.”

However, hedge fund replicators and quantitative managers need not apply, because 3D will look to invest in managers with “simple business models,” such as long/short equity shops.

“They’re very stable and have full control of their businesses, especially in relation to the ongoing crisis in the financial markets,” said Bodin.

3D, which may take a part of the underlying managers’ general partnership or share in its profits, is in the process of setting up an advisory board and is in negotiations with hedge fund analysts to head its new business.

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