Hedge Funds Manager Developments (May 2014)

Blue   Sky   Alternative   Investments   will   acquire hedge fund firm Investment Science through a transaction comprising of 100% Blue Sky scrip and upfront  and  deferred  consideration   components. Investment   Scienceʼs   details  are  in   Basis  Point Consultingʼs Australian Investment Managers Directory.

Blue Sky reported a net loss of $2.89 million in the six  months  to  Dec  2013.  The  firm  is  currently mulling the establishment of an alternatives fund of fund or multi-manager style product.

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Folkestone,   a   real   estate   fund   manager,   has acquired  Maxim  Asset  Management   a boutique funds  manager  focused  on real estate  securities. The    acquisition    will    enable Maxim    to    use Folkestoneʼs   distribution   capabilities.   Maxim, co‐founded by Winston Sammut in 2003,       manages the Maxim Property Securities Fund, which invests in Australian listed real estate  securities,  and the Maxim Income Fund.

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Paris based Capital Fund Management (CFM) is marketing    its    quantitative    systematic   trading program ʻInstitutional  Systematic  Diversifiedʼ  (ISD) fund to Australian superfunds. Quant-focused CFM was established  in 1991 and has $5 billion  AUM with offices in Paris, New York, Tokyo, and London.

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ASX-listed HFA Holdings will seek to appoint more US-based independent non-executive directors in acknowledgement    ʻthat    the    most    significant operations  of  the  HFA  Group are  based  in  the United States.ʼ

The   firm   is   searching   for   a   candidate   with experience  in the US hedge  fund  space  to fill at least one board seat. The development  coincides with   the   decision   of   HFA Chairman,   Spencer Young,  to step down from his current  position  as Chairman  and non-executive  director  of HFA due to personal  commitments.  Young  was  founder  of HFA in 1999.

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Acorn Capital aims to raise between $50 million to $100 million via an ASX-listed fund that will mirror its   institutional   listed   and   un-listed   micro-cap strategy. The firm, which has been running the strategy since February 2009, has $1.1 billion in AUM. The boutique  fund manager is 44% owned by  Australian   Unity  (details  in  the  Basis  Point Consultingʼs Investment Managers Directory).

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Challenger and Access Capital Advisers (ACA) will merge their infrastructure investment operations to create   a   new   boutique   infrastructure   business called Whitehelm Capital. Whitehelm  will start on 1 July 2014 with $4 billion AUM and 48 employees in London, Sydney, Singapore,  and  Canberra.  ACAʼs  executives  and staff will own 70% of the firm. Challengerʼs Fidante Partners boutique funds management business will hold the remaining 30%.

Whitehelm will be a manager of core infrastructure assets such as regulated utilities, toll roads and airports. It will be capable of sourcing,  structuring and arranging investments across the capital structure in Australia, Asia, Europe, North America, and South America.

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WaveStone  Capital has launched a new long-only product  -  the  WaveStone   Wholesale   Australian Share Fund. WaveStone offers the WaveStone Absolute   Return   Fund  and Dynamic   Australian Equity  Fund.  Details  in   Basis  Pointʼs  Australian Investment Managers Directory.

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Treasury  Group has taken a 15% equity stake in ROC Equity  Partners. ROC was formed  in March 2014 when the three fund managers of the former Macquarie  Investment  Management Private Markets  unit executed  a MBO for an undisclosed figure. At the time of sale, the business reportedly had $5 billion AUM.

Meanwhile, Treasury Group reported a net profit of $6.76 million for the half year ended 31 Dec 2013, representing an increase of 12% on the prior corresponding  period.  The  firm  owns interests  in eight boutiques located in Sydney, Melbourne, Singapore, and Edinburgh that collectively manage over $19bn in AUM.

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Fidante Partners is incubating a global smart beta boutique fund, Tempo Asset Management. Tempo was founded by Joe Bracken and Robert Chapman, (both  ex-BTIM),  who have  worked together  since 2007. The firm operates an active investment strategy that aims to outperform global indices.

Meanwhile,  Jacqui  Fernley  (ex-Wilson  HTM research  head  and  small  caps  specialist)  is also expected   to   establish   a   boutique   fund   under Fidante,   according   to   the  Australian   Financial Review.  Fidante  Partnersʼ  FUM  was  $33.7  billion at 31 December 2013, an increase of 40% from 31 December 2012.

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Grant  Samuel   Funds  Management   and  Triple3 Partners  have  formed  a partnership  that will see Grant Samuel distribute the newly launched Triple3 Volatility Advantage Fund to the Australian market. Simon Ho, founder and chief investment  officer of Triple3 Partners, says volatility has emerged as a distinct  asset  class  in  recent  years  that  offers  a largely untapped source of alpha for investors’ portfolios. Details of Triple3 can be found in Basis Pointʼs  directory  of  independent  investment  fund managers.