MADRID — Hedge fund firm Vega Asset Management is forming a joint venture with BBVA, a Spanish financial services company. The new firm, Proxima Alfa Investments, will offer alternative investment strategies through offices in Madrid, London and New York. BBVA is taking a 51% stake in the new firm and will contribute $1 billion of seed capital. Jose Barreiro, head of BBVA's global markets and corporate and investment banking, will be chairman of Proxima Alfa. Vega will hold a 49% stake and will contribute its VegaPlus hedge fund incubation platform to the new venture. The platform has 10 single-strategy hedge funds managing a total of $2 billion. Proxima Alfa will also seed, develop and market single-strategy hedge funds under terms of a multiyear contract, according to the statement. Vega Asset will continue to manage five hedge funds and two hedge funds of funds, said Vega spokesman Robin Gilliland.
Vega, BBVA create alternative investment joint venture
LONDON — U.K. pension funds are increasingly interested in alternative investments, according to two recent surveys.
U.K. pension funds had 1% in alternative assets — defined as hedge funds, private equity and venture capital — as of Sept. 30, up from 0.3% as of Sept. 30, 2002, according to a Mellon Analytical Solutions survey of 597 U.K. funds with total assets of more than £189 billion ($328.5 billion). Weightings in alternatives had been fairly static for the eight years prior to 2002, the survey said. Hedge funds and absolute-return mandates represented 62.7% of pension funds' alternatives investments, and private equity and venture capital combined for 37.3%.
Separately, about 450 U.K. pension funds advised by Watson Wyatt Investment Consulting awarded 61 alternative investment mandates in 2005, up from 16 in 2003, according to Watson Wyatt's annual update on U.K. activity. The leading areas were real estate, with 14 mandates; private equity, 12; and global tactical asset allocation, 11.
NEW YORK — Hedge fund launches and liquidations both set records in 2005. According to year-end data just released by Hedge Fund Research, 2,073 new funds were created in 2005, compared with 1,453 in 2004. The hedge fund liquidation rate last year was 11.4% in 2005, with 848 funds shut down, compared with 4.7% in 2004, when 296 funds closed.
Hedge funds of funds were still being created in 2005, but they represented a smaller proportion of overall fund startups. Last year, 498 new funds of funds were launched, or 24% of total new funds, compared with 465 launches in 2004, or 32.4% of the total, and 479 new funds of funds in 2003, or 43.8% of the total. The rate of funds of funds creation as a percentage of total new fund introductions peaked in 2003, while 2005 represented the apex in hedge funds of funds closures, with 156 funds going out of business, a 9.42% attrition rate, according to HFR data.
HFR bases its data analysis on the 9,000 hedge funds tracked by the firm, including data reported directly to the company by 5,500 hedge funds.
JUNEAU, Alaska — Alaska Permanent Fund Corp. will soon search for at least one hedge fund-of-fund and/or multistrategy managers to run a total of $400 million, said Mike Burns, CEO. Consultant Callan Associates will create a shortlist of potential managers. The move would complete the $33.7 billion fund's move to boost absolute-return strategies to 4% of total assets from 1%, under an asset mix change approved late last year. Funding will come from fixed income. Selection is expected at the board's May 24-25 meeting.
Fund officials also plan to hire a fixed-income portfolio manager to join the four-member team that internally manages more than $8 billion in domestic bonds. They are replacing Eric Richter, who left the fund Feb. 16 to join OppenheimerFunds as vice president, a new position. The application can be found at www.apfc.org. Completed applications are due by March 20.
SANTA ANA, Calif. — Orange County Employees Retirement System, Santa Ana, Calif., decided to invest its entire 5% alternative investments allocation in private equity, said Keith Bozarth, CEO of the $5 billion system. "The decision was based on a desire to focus alternatives allocation on return enhancement," Mr. Bozarth said.
The board also decided to invest the remainder of its 10% real estate allocation — about $65 million — in enhanced commingled funds as the "most efficient way to obtain diversified exposure" to real estate, he said. Mr. Bozarth said search parameters will be formed over the next few months, and no timetable has been established.
NEW YORK — SkyBridge Capital, a hedge fund investor, closed its first fund, SkyBridge Capital Partners, according to a company statement. SkyBridge invests with emerging hedge fund managers and provides them with investment and business management advice.
Spokesman Jason Wright did not return a call seeking the size of the newly closed fund, but press reports put assets between $325 million and $330 million.
The firm has invested with Brompton Cross Capital Advisers, a global long-short equity fund focusing on the technology, media and telecommunication sectors, and Westport Capital Partners, which makes opportunistic public and private real estate investments. SkyBridge Capital is seeking more "talented early-stage managers," Anthony Scaramucci, managing member and a co-founder of the firm, said in the statement.
SkyBridge Capital is backed by MSD Capital, the investment firm managing the capital of Dell Computer founder Michael S. Dell and his family. "MSD has made a substantial investment in the fund as a limited partner and has entered into a long-term strategic relationship with SkyBridge," according to the company statement.