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New Managers April 2019

SEEDERS & PLATFORMS: Melanion Capital, Lyxor Americas launches alternative investment co-investment programme for institutional investors

 

Paris-based hedge fund manager opens seeding programme for niche strategies

Melanion Capital, an independent investment manager based in Paris, is launching a seeding programme that can house two to three early-stage managers who run a hedge fund or a managed account. The programme will run for two years, with tickets of up to $10m.

The managers at Melanion know what new managers go through from their own experience seven years ago, when they first launched their dividend futures fund, and from a first seeding experience they had two years ago.

"Because we focused on a niche strategy, we encountered a lot of barriers to entry to the market," Jad Comair, founder and CEO of Melanion, tells Opalesque . "The first barrier was institutional investors who wanted a track record, established AuM, etc., which we did not have at the time. The second barrier was, our product was niche so it did not fit within the plain vanilla category that asset allocators were looking for. The third was, because we were a niche trading product and we were limited in terms of possible expansion, we weren't scalable for investors who had millions to invest and we did not interest seeders who were looking to back managers and get an equity stake."

All these closed doors were closed for the wrong reasons, he believes. So the firm had to stretch a lot of financial resources to cope with the hurdles and get results. And since then, the hurdles have exacerbated, he notes. Melanion's seeding programme will welcome managers who are focused, as they are, on niche strategies that are non-scalable or not plain-vanilla. "We will be seeding them by trading their own dedicated fund and allowing them to build a track record for two years," he explains. "Then, we will open their funds to our client base, market the funds and raise assets. We will appeal to high-networth individuals' risk pockets. We appealed to such investors when lo......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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