Seed funder looks at Aussie hedge funds

A subsidiary of United Kingdom-based financial services house Financial Risk Management is scouting Australian-based hedge fund specialists with the intention of providing fund seeding.

The company, FRM Capital Advisors, has provided seed funding to six hedge fund managers in the past two years — four in the US, one in Europe and one in Hong Kong — but its chief operating officer, Patric de Gentile-Williams, believes it is only a matter of time before it finds a suitable candidate in Australia.

“Given the depth and sophistication of the local industry, I would be amazed if we don’t do something with an Australian-based manager,” he told Super Review.

De Gentile-Williams said the underlying criteria being utilised by FRM Capital Advisors in selecting managers was the existence of relative liquidity, an aversion to long-only managers, existence of a scalable strategy and an experienced team approach.

He said the company’s interest was based on its belief that the hedge fund sector had performed comparatively well through the global financial crisis and was likely to continue to do so.

De Gentile-Williams said the company believed the hedge fund sector would produce returns over the next five to 10 years comparable to those achieved over the past five to 10 years.