UBP Preps Hybrid Distressed Fund of Funds

Jul 16 2008 | 3:33am ET

Union Bancaire Privée is launching a hybrid hedge fund-private equity fund of funds to exploit opportunities in the distressed market.

The SquareInvest Distressed Opportunity Fund will make its debut next month and plans to raise US$500 million from institutional and other investors. The UBP Pension Fund is seeding the fund with a “significant” amount, according to Vincenzo Narciso, UBP’s head of private equity.

“The idea is to offer our clients a one-stop shop solution to take advantage of the dislocation in the market, particularly in the distressed space,” said Narciso. “We want to combine what we do on the hedge fund side, which is our core business, with the opportunities we see on the private equity side.”

The fund will initially invest up to 80% of its capital in underlying hedge fund managers while initiating the remaining balance to commitments in p.e. funds. And at the end of the third year, depending on how the hedge fund portion of the fund has performed, the bank may make a large distribution to its investors and shift its entire portfolio to private equity.

“By doing this we eliminate one of the historical problems in p.e., which is the J-Curve,” said Narciso. “When you invest in a p.e. fund, your fee eats into the NAV so you see a negative IRR for the first couple of years. By putting money into hedge funds, you eliminate that problem because they start to perform from day one.”

The SquareInvest Distressed Opportunity Fund will invest in some 18 hedge fund managers and 12 to 15 p.e. managers in the U.K. and U.S.

It charges a 1.5% management fee and a 10% performance fee. The minimum investment requirement is US$1 million for individuals and US$10 million for institutional investors.


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.