24/05/2010 Author: Tony Griffiths

IMQubator seeds Cavenagh Capital

IMQubator, the Netherlands-based seeding initiative backed by pensions management giant APG, has made its first allocation to a non-European hedge fund, with a further four funds expected to receive allocations later in the year.

According to sources close to the deal, Cavenagh Capital, a Singapore-based boutique founded by industry veterans Andrew Gale and Lee Ka Shao, will receive €25m ($30.9m) for the launch of a Luxembourg-domiciled Asian macro fund, and will relocate to Amsterdam as part of the process. The new vehicle, the Cavenagh Asia Fund, will go live on 1 July.

Rikard Lundgren, CIO, told HFMWeek that IMQubator expects to finalise its next seed deal at the end of June, with a further three funds likely by the end of the year bringing the platform’s total to eight. According to Lundgren, all future investments are expected to be in hedge funds. IMQubator has now received more than 200 applications from funds eager to secure seed capital, he added. 

The Cavenagh vehicle is one of four funds currently on the IMQubator platform, along with two other hedge funds and one private equity fund. All four received the company’s standard €25m ($30.9m) allocation and have moved to Amsterdam, in keeping with the platform’s requirements. 

Emerging manager platform IMQubator was launched in January 2009 with the support of the Holland Financial Centre Foundation, an industry organisation set up to strengthen the Dutch financial sector. Overseas managers applying for funding must be willing to relocate to the Netherlands.

The firm has already received €250m ($309m) from APG – asset manager for the world’s second-largest pension fund, Heerlen-based ABP, which has $270bn in AuM – along with smaller commitments from other Dutch institutions.

The project is aiming to reach €750m ($929m) with further investment from large Dutch and international pension funds, but will wait until 2011 before upping its investment pool, choosing instead to concentrate this year on building its portfolio, Lundgren said.

IMQubator secured its first seed deal in June 2009, allocating €25m ($30.9m) to the Branta Solutions Fund, an investor in environmentally sustainable schemes. Based in London, but with Dutch ties, the long/short vehicle relocated its primary business to Amsterdam as part of the deal.

Prior to launching Cavenagh Capital in 2009, co-founders Gale and Ka Shao held a number of high-profile industry positions. CEO Gale was previously at listed fund of hedge funds firm Dexion Capital, while Ka Shao, the firm’s CIO, was at Abax Global Capital in Hong Kong.