An American pedigree could provide big rewards for managers riding the boom in hedge fund-of-funds listings on the London Stock Exchange.
In late July, Goldman Sachs Asset Management, a subsidiary of Goldman Sachs & Co., New York, became the first U.S.-based firm to launch an initial public offering on the LSE for an in-house managed hedge fund of funds. The Goldman offering — Goldman Sachs Dynamic Opportunities Ltd. — also was the largest such float, at $507 million.
Sources say American hedge fund managers are well represented among the 18 firms Goldman hired to invest the underlying portfolio in both core and niche strategies.
Each new IPO in London creates an opportunity for U.S. hedge fund managers. Some of the newly listed companies construct fund-of-funds portfolios internally, then look for managers to absorb new capital, sources said. Others hire funds of funds as subadvisers, rather than rely on an internal portfolio construction team.
Among the most recent IPOs:
• CMA Global Hedge Fund PCC Ltd., managed by Capital Management Advisors, Hamilton, Bermuda, was the second-largest hedge fund IPO raised on the LSE — at $402 million;
• Charlemagne Capital Ltd., London, an emerging markets specialist, $209 million; and
• Absolute Capital Management Holdings Ltd., London, $84 million.