All In The Family: A To B Readies Hedge Fund

Sep 22 2008 | 2:57am ET

After three decades of representing small-cap companies on the sellside, a family of investor relations executives is branching out to the buyside with their first hedge fund.

Red Bank, N.J.-based A to B Capital Management plans a special situations fund to exploit opportunities in the small-cap space through investments in private, pre-initial public offering and publicly-traded companies.

Andrew Kaplan, co-founder, says there's a dearth of hedge funds playing in the small-cap space.

"With the way the market's been, everybody in the small-cap space is so gun-shy that they're not making investments and looking at the small companies that have potential," says Kaplan. "When the economy turns around and pulls out of this, they always say that small companies are the ones that move first. We want to help companies go from A to B, so we want to be there when no one's there and hopefully make a lot of money."

Kaplan runs the hedge fund management firm with his parents, Barry and Madeline, and his brother, Lawrence. In addition, Jess Mogul, a former Bear Stearns managing director, serves as a non-family co-founding member of the firm. He is currently managing director at Lighthouse Financial Group and senior managing director at Multitrade Securities. Kaplan says the firm is looking to fill out its roster with the addition of a private equity vet who is well-known within the small-cap space.

The firm began sending out documents to prospective investors last week and is looking to wrap up its first closing at $25 million within 30 to 45 days. The fund charges a 2% management fee and a 20% incentive fee with a $300,000 minimum investment requirement. Its prime broker is Cuttone & Co. and its auditor is Rothstein Kass.

The Kaplan family has represented small-cap concerns since 1978 under the monkier Barry Kaplan Associates.


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