A European equity hedge fund, with a long history of steady levels of AUM, were investigating how to grow their assets to allow the business to remain profitable due to the fixed costs of running a modern day fund manager continuing to rise. They were aware of the need to raise more assets from European investors but were conscious of not cannibalising their flagship offshore fund by creating a mirrored UCITS fund with better liquidity terms.
We discussed with the client how the addition of another portfolio manager with a purely European focus could allow them to run a separate UCITS fund with a separate product. This fund would have a more European focus than the flagship fund whilst also having the liquidity required for UCITS. They would still be able to incorporate a lot of the more liquid positions from the flagship fund into the UCITS fund, being differentiated enough to provide different liquidity terms whilst also allowing for certain positions to be taken in both funds.
We presented the client with a shortlist of five candidates that all met their important cultural considerations whilst also having strong demonstrable track records that would allow them to carry weight when raising assets from European investors. The client hired one of the portfolio managers and is now currently running over $600m in the UCITS fund with a little over a year of track record.