25/01/2012 Author: Elana Margulies

Herron and ITT launch philanthropy-focused fund

Herron Capital Management, a California-based investment manager, has teamed up with Interbank Trading Technologies (ITT), a UK-based operational consultant, to launch a new hedge fund, HFMWeek has learned.

The offering, called Do The Right Thing (DTRT), which is expected to debut in the next two or three months, combines long exposure to fixed income with options selling and position trading.

Specifically, the fund will focus on companies and market sectors dealing with hunger, thirst, disease and clean energy problems, while also donating fees to charities.

Michael Herron, DTRT’s portfolio manager, said he and David Rose of ITT decided to launch this strategy to give investors access to more philanthropic causes.

“We believe that investors can dictate the tempo of providing real solutions for our world’s problems by investing in new technologies designed to move humanity forward,” he said.

The fund’s investors will  receive a tax deduction by directing a portion of the manager’s profit-sharing fees to their qualified charitable organisations of choice. They will also receive a capital guarantee and minimum fixed rate of return with a variable upside profit potential.

Herron said he is currently in talks with potential seed capital providers and anchor investors to help the fund reach its $2bn capacity.

The DTRT fund will have a $25,000 investment minimum, 1.5/25 fees and a five-year lock-up for the capital guarantee version, with no lock-up for the other version. Its service providers are yet to be confirmed.