David Beattie

25/01/2012 Author: David Beattie

Editor's view: 25 January 2012

The trend for launching new hedge funds built with the individuals, the blessing and sometimes the seeding capital from established former employers looks set to continue in 2012, if recent industry movements are anything to go by.

This week, HFMWeek reports that Incline Capital Management, set up by former Appaloosa Management partner Jeff Lignelli, is set to launch its flagship fund in Q2 with not only the backing, but some investment from Appaloosa supremo David Tepper.

Last year saw a number of spin-outs from established funds, notably Stone Milliner Asset Management, which was in part borne out of the Moore Capital stable. At the time, sources indicated the new fund would enjoy ‘broad-based support’ from Moore Capital – which has gained a reputation for backing its former employees. Earlier in 2011, Paul Findley left to start Bramshott Capital, again reportedly with Moore’s backing.

Industry sentiment towards this method of establishing new funds seems, in general, to be positive but it is by no means a mainstream strategy, yet, and so remains the exception rather than the rule.

But its attractiveness should not be undermined, and when compared with a regular seeding exercise, this model could see new funds launched in a shorter time – not only with adequate funds, but with the right people and a high-quality infrastructure – vital and valuable attributes for any nascent fund. 

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