Thames River capital has created a hedge fund of funds that will
invest up to 33 per cent to seed new managers or start ups, enabling
investors to benefit from the dividends of these companies.
Thames River hedge + will be managed by Ken Kinsey-Quick, who
joined Thames River in January 2003 as head of the multi-manager
division. Kinsey-Quick also manages the Thames River distressed
focus and Thames River warrior funds. He has 20 years' investment
experience, including 10 years' hedge fund experience, which
involved seeding hedge funds.
The core portfolio of Thames River Hedge + will be established
hedge funds and this will be based on the Thames River warrior
fund. There will initially be between 10 and 15 established hedge
funds in the portfolio and as investment opportunities arise, money
will be allocated to up and coming managers and to seeding start-up
Initially the fund will invest 19 per cent of the portfolio in distressed
funds, 18 per cent in multi-strategy hedge funds and 17 per cent in
US equity hedge funds. Smaller amounts go into other areas such as
merger arbitrage, fixed-income arbitrage, convertible arbitrage and
equity hedge Europe.
Kinsey-Quick will include early stage and start-up funds because
Thames River believes funds make the best returns in their first three
years. However, the drawback is that although returns may be
enhanced, there is also added risk involved in this strategy compared
with funds of hedge funds that focus only on established funds.
The Thames River hedge + fund is likely to suit experienced investors
who are keen to have positive returns in all market conditions with
more diversity than a single hedge fund. Despite signs that the global
economy has improved, progress is slow and a low correlation to
bond and equity markets may lead to higher returns than currently
available through long-only funds.