Stillwater's Hedge, FOFs Make Steady Returns

Dec 18 2006 | 2:27pm ET

New York-based Stillwater Capital Partners’ hedge fund and fund of funds are having another strong year.

Through November, the firm’s hedge fund, The Stillwater Asset Backed Fund, is up 10.16% net, its asset backed fund of funds, The Stillwater New Finance Fund, is up 10.41% net, and its flagship multi-strategy fund of funds, The Stillwater Advantage-20 Fund, is up 12.75% net.

“Focusing on the asset-backed lending space enables us to produce the lower volatility, steadier return pattern our clients are looking for. This is truly a market-neutral strategy that can generate absolute returns, especially with the asset-backed lending where you’re making loans and the interest from those loans end up being the returns to investors,” said Jonathan Kanterman, managing director.

“As long as you have thorough due diligence, expert underwriting and diversification... and you make sure your collateral is above your loan amount, then if there ever is a default you’re able to take back the asset and dispose of it, recouping your interest plus principal. If you’re looking for 10-12% steady returns with very low volatility, then it’s a great strategy.”

The Stillwater Asset Backed Fund charges a 1% management fee and 20% performance fee, and both funds of funds charge a 1.5% management fee and 10% performance fee. The firm’s funds of funds do not invest in its in-house hedge fund. All three products have a minimum investment requirement of $500,000.

Stillwater, which currently manages over $650 million, was founded in January 1997 by managing principals Jack Doueck and Richard Rudy.  Stillwater is independently and fully audited and registered with the Securities Exchange Commission.

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