New York-based Holding Capital Asset Management has acquired a minority stake in RKC Capital, a Salt Lake City-based hedge fund.
Holding Capital will help RKC founder Rusty Cannon establish a general partner entity for his long/short and market-neutral hedge funds, the Matador Fund and the Matador Market Neutral Fund, and assist the firm in “tightening” up its marketing materials.
“We’re basically looking for somebody we can trust since we do partner with them,” said Alan Reed, investment analyst, who manages the day-to-day operations of Holding Capital’s seeding unit. “We like RKC’s return profile and methodology. One thing we look for is a methodology that is simple and adaptable.”
Reed said his firm looks to invest in long/short equity strategies and doesn’t restrict its focus to any particular region. In addition to helping managers set up their operations, Reed said the firm also launches its own funds and tries to find managers to manage them where it deems there is a dearth of talent.
The firm is currently prepping an India-focused micro- and small-cap hedge fund with a locally-based manager “who knows that market,” and is looking to round up co-investors for the offering.
“We feel that India is pretty overvalued in general but we do see value in small caps and Holding Capital has had a lot of success investing in small caps in other regions like Russia,” said Reed.
In addition, Holding Capital will also help offshore managers set up their onshore funds and is currently in talks with a Brazilian hedge fund to create an onshore vehicle and open it up to U.S. investors. Reed said the firm is also looking for co-investors in this deal, which is “something that’s off in the horizon.”
Holding Capital Asset management is an affiliate of Holding Capital Group, a private equity investment and international money management firm. The group also manages an internal fund of hedge funds, Conservation Securities International, a $140 million global offering.