Alternative Market Briefing

London manager Culross launches FoHFs with liquidity terms worse than most hedge funds

Friday, December 11, 2009

By Benedicte Gravrand, Opalesque London:

Over the past decade, credit has been an important profit generator for Culross Global Management, a London-based FoHFs manager, and the company believes that the less liquid opportunities now on offer merit their own vehicle.

With this in mind, Culross launched the Culross Long Term Alpha Fund on 8th December.

This new Fund provides full transparency to investors and undertakes not to invest in funds offering less liquidity than the fund itself does to its investors (Culross boasts to have never gated or side-pocketed any investors.)

This shows willingness to return to basics - and consequently it is also a veering away from me-too funds offering very fast liquidity terms. Indeed, the fund has a 12-month lock up period, and the annual liquidity is for a third of the investment - with an option to elect the redemption date to 30-June instead of 31-Dec. That liquidity profile matches longer term opportunities emerging from the current cycle of creative destruction, and minimize unstable co-investor risk, says Culross.

The fund targets 15-20% return p.a. with a volatility of 8-10%, and will be investing in 8 to 15 funds. "We try to find small funds," said Christopher Keen, partner at Culross during a briefing at their Mayfair offices yesterday - as the firm has observed that older and/or bigger funds do not perform as well over the long term. "Our hallmark is "not too many funds"......................

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