Sunday, 25 January 2015
Last updated 1 day ago
Oct 19 2006 | 1:54pm ET
Six-year-old asset management firm Adair Capital is gearing up to launch its first onshore vehicle early next year. The new offering, Adair Global Opportunities Fund, will be a global long/short equity vehicle targeted at domestic institutional investors.
The New York-based fund of hedge funds firm currently manages in excess of $300 million in its three offshore vehicles, a multi-strategy fund, a long/short equity fund, an emerging managers fund, as well as separately managed customized portfolios.
“We’ve built a successful track record with our three offshore funds, so now we would like to start attracting some U.S. taxable investors,” said Paolo Alimonti, co-founder and managing director of the firm. He explained that while the new offering will have a mix of emerging and seasoned managers, that he and co-founder Pierre Durand specialize in discovering emerging managers.
“We tend to get involved early on in the life of a fund,” said Alimonti, who added that the seven-member firm does not seed new managers, but it does go in as a “day-two” investor.
Jeanne Newman, a director at Adair, joined the firm earlier this year to help market the new fund.
“What sets us apart is our ability to find great managers early on in the process,” she said, adding that the research-focused firm is wary of managers who get too big too fast. “This rapid asset growth tends to correlate with lower alpha production and can be a critical issue in niche strategies with limited investment capacity,” she said.
But while Adair is always seeking new talent, new managers shouldn’t come knocking on the door unless they are fully prepared to run the operations.
“Hedge funds are businesses, so when we are investing with a younger company we like to see a thorough business plan in place,” Alimonti said. “Being a businessman is very different from managing money, and some people don’t have both skill sets.”
The firm also prefers to go with managers who use very little leverage.
While Alimonti and Durand have known each other for over 20 years, since their Wall Street days at Bankers Trust, they each bring a different skill-set to the business, with Alimonti having a background in corporate finance and risk management and Durand coming from the proprietary trading side of the industry.
“We have been on the other side of the fence, which gives us an advantage in understanding hedge fund strategies and building portfolios” said Alimonti, who before founding Adair in March of 2000—just weeks before the Nasdaq crashed—was with risk advisory firm Emcor.
Prior to founding the firm, Durand was a director both at Bankers Trust and Donaldson, Lufkin & Jenrette, specializing in trading emerging markets. While Adair doesn’t have an emerging markets-focused fund, the managers see a lot of talent coming out of places such as Brazil, and are looking for managers based in the local markets, both for their new fund and their existing ones.
As for all the talk lately about funds of funds charging high fees, Durand said that Adair’s fees are “average” for the industry and that what really matters is performance.
“At the end of the day, what people really focus on are the returns after fees,” he said.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…