The three founding partners of Imperium Partners Group LLC have a new vision for managing alternatives for institutional investors.
"The traditional hedge fund model is broken," said James R. Hedges IV, one of the partners of the New York firm. "The hedge fund model is not a true partnership — where people work together as a team and everyone is rewarded equally. Instead, only the hedge fund manager whose strategy happens to be doing well gets his 20% performance fee in a given year. In hedge fund companies, it's ‘kill what you can' in order to maximize your performance, then ‘eat what you kill' when it comes to performance. We want to change that," Mr. Hedges added.
Mr. Hedges is joined by Jeffrey E. Devers and John C. Michaelson in creating a hybrid investment strategy that will combine elements of private equity and hedge funds in making strategic investments in public and private small-cap and midcap growth companies. The firm will centralize research functions, and all employees will be offered a stake in the company, Mr. Hedges said.
Mr. Hedges founded LJH Global Investments LLC, Naples, Fla. The firm will continue to offer hedge fund advisory services to existing high-net-worth clients but will not accept new business. LJH's other main activity — principal investing in private equity, venture capital and distressed securities — will be transferred to Imperium Partners.
Mr. Devers was president of The Palladin Group LP, Maplewood, N.J., which closed in 2002 and has since been winding down its less liquid investments, said Mr. Hedges. Mr. Michaelson was vice chairman of Needham & Co. Inc., New York, and president of Needham Investment Management and the Needham Funds.