11/07/2008

Three Rivers allocates to long/short managers

Three Rivers Equity Management, a Pittsburgh-based fund of hedge funds (FoHF) manager with approximately $330m under management, has allocated to two long/short hedge funds, according to vice president Christopher Burton.

The FoHF last quarter allocated $1.5m to Manalapan Oracle Eagle Fund, a Connecticut-based $50m long/short hedge fund. Also, on 1 March, it gave $4m to Eastern Advisors, a $500m Asian-focused long/short hedge fund manager.

After seeing their performance, Burton determined both Manalapan and Eastern would be good fits. For Eastern specifically, Three Rivers was attracted to the fund because much of its returns are generated from shorts, he said.

On 1 August, Three Rivers will add another $2.5m to Manalapan and another $1.5m to Eastern. Manalapan Oracle Eagle, which returned 16.5% net YTD through June, takes long positions in energy, healthcare and infrastructure, and shorts in broad market exchange-traded funds, financials and retail.

Eastern Advisors, started by former Tiger cub Scott Booth, returned approximately 3% YTD through June and was one of the top-performing hedge funds last year, with a 91.6% return. Among Three Rivers’ three FoHF offerings – Three Rivers Equity Partners Fund, Three Rivers Multi-Strategy Fund and Three Rivers Investment Opportunity Fund – there are 26 underlying managers. Burton said the FoHFs will stay in that range.

The YTD returns through May for the funds are 2.13%, 0.36%, and -1.1% net, respectively. Three Rivers founder Mark Veenis is also the fund’s portfolio manager. Before forming Three Rivers, he was most recently at Smith Barney.