ALTERNATIVE INVESTMENT MANAGER LAUNCHES LONG-BIASED MACRO FUND THAT SETS NEW
STANDARDS IN INVESTOR PROTECTION
- Fresh approach and strong credentials draw support of blue chip providers –
This week sees the launch of new independent investment manager Aros Capital Partners LLP, a company that aims to raise standards of investor protection in the hedge fund industry. The London-based Anglo Danish company also announces the launch of Aros Paradigm Fund SICAV, a single strategy Global Asset Allocation Fund, with leading edge investor protection mechanisms built into its structure along with strong corporate governance measures.
The fresh approach that the Manager has taken includes domiciling both the Fund vehicles and Management company within the EU, thus making it a complete onshore hedge fund structure, yet not constrained by UCITS III. The structure has gained the approval of three regulators – the Financial Services Authority (FSA), the Maltese Financial Services Authority (MFSA) and the Danish regulator (Finanstilsynet).
The founding team behind the company consists of Nicolai Borcher Hansen, Peter Brink Madsen, Christian Falster and Jacob Madsen. Three of the founders recently broke away from Denmark’s largest privately owned asset manager, Formuepleje. The investment management team bring a strong and audited track record and have already produced one of the best performances in Europe*.
The Aros Paradigm Fund is an open-ended vehicle aimed at HNW and institutional investors. The investment strategy is based on a proprietary dynamic asset allocation model, aiming to create an investment with the highest risk adjusted return.
KEY POINTS:
- New London-based Anglo-Danish hedge fund company with fresh approach and ambition to raise standards of investor protection and communication
- Investment team has 5-year audited track record in investment strategy upon which Paradigm Fund is based, producing one of the best performances in Europe* and grew the company from USD 750 million in assets under management, to USD 4 billion in over 5 years creating Denmark’s largest independent asset manager in the process
- Onshore Manager and Fund Pioneering fund structure with in-built investor protection - triangulation of checks and balances: Citco Fund Services, the world’s largest fund administrator, is responsible for official pricing, independently providing a monthly hard Net Asset Value (NAV). Bedrock RealTime SA, the outsourced operator, runs additional shadow accounting “keeping a check on the checker” and striking a soft NAV each day. This system of two independent parties providing checks and balances should provide investor with absolute comfort
- Low fee structure: 1.25% fixed pa and a 10% performance fee (no hurdle)
- 30-day liquidity
- Building on principle of TCF to institutional and HNW investors: transparency of strategy and timely investor feedback
- Asset allocation fund based on Modern Portfolio Theory - deeply grounded in theoretical understanding but applied through practical experience and with a value bias
- The Fund and Manager have secured a strong independent Board, a respected team of international partners and advisers and an impressive pool of in-house talent
Founding partner Nicolai Borcher Hansen sums up what is so different about AROS Capital Partners:
“Our focus will be first and foremost on our clients’ interests and on honest long term relationships – and this is much more than rhetoric. We are well aware of the problems that have characterised the recent crisis and of the need both to reassure investors and to break the mould. There are many things we would like to lead from the front on, but in particular, we do not think it is reasonable for companies to set the official NAV calculation of their own funds.”
valuations. This is the reason for the structure of our Fund, and our pioneering system of checks and balances, using independent parties as external controls.
Christian Falster says: “Working intensely alongside top advisers such as Bedrock, Eversheds and Ernst & Young has helped tremendously in building a robust and transparent onshore structure for a new generation European hedge fund.”
Nicolai adds: “In the wider sense, our aim is to lead by example, raising standards, promoting openness and stimulating change in the industry. We have a number of interesting products we are working on, which develop further the theme of responsibility...”
INVESTMENT TERMS:
Launch date: 2nd November 2009
Target return: 10-12 % p.a. over next three years
Instruments: Global bonds and equities (focus on Large Caps), Danish mortgage bonds, FX and derivatives
Leverage: Dynamic leverage up to two times i.e. a minimum of 33.3 % solvency
Number of positions: Equities ~50 long, ~10-15 short, Corporate Bonds: ~30 long, Danish Mortgage Bonds: ~15 long, FX: ~4-5 currencies
Liquidity: Monthly liquidity, 30 days redemption period notice
Fees: Management fee of 1.25% fixed and 10% performance fee, no hurdle
Minimum investment: EUR 75,000
Operational support: Bedrock RealTime S.A, Geneva
Prime Broker: UBS AG, London
Administrator: Citco Fund Services, Dublin
Auditor: Ernst & Young
Regulators: Investment Manager and Fund regulated by Malta FSA, sub Advisor by UK FSA.
* Formuepleje LimiTTellus - long only equity fund - did return better than relevant indices and most peers in an ad hoc analysis.
** Formuepleje Safe, which is directly comparable with Paradigm Fund, returned 0.74% per month on average compared to the MSCI World 0.33%, the CS Tremont HF MS 0.25% and CS Tremont HF Global Macro 0.58% in the 53-month period the team ran it.
- ENDS -
For further information or detail, please contact:
Christian Falster, Chief Executive Officer,
Aros Capital Partners 07772 653378
Bernadette Motion, PR Consultant 07702 620284
Learn more about Aros Capital Partners at www.aroscap.com
COMPANY BACKGROUND
About Aros Capital Partners LLP
Aros Capital Partners LLP is a new independent investment management boutique, offering alternative investment management products. Its strategies and products are based on a proprietary dynamic asset allocation model and risk management process.
The Anglo-Danish company was formed at the beginning of 2009 by four partners – part of the former investment management team and advisory team at Formuepleje, Denmark’s largest independently-owned asset manager, plus a former senior relationship manager at FBR Capital Markets International.
Headquartered in London, it also has offices in Aarhus, Denmark and Malta. Aros stands out among its peers in that it has set up a unique system of checks and balances to protect investors and their portfolio value and a strong and multi-layered corporate governance structure to further reassure its clients.
Blue Chip Partners
The company has attracted a team of Blue Chip service providers including leading international legal and financial corporations, such as Ernst and Young, Eversheds, Citco Fund Services, Bedrock RealTime SA and UBS.
Christian Falster says: “We were able to reach out and attract an absolute A-team of industry advisors at a time when most were preoccupied with shutting down or restructuring funds. To me it speaks volumes when at the darkest hour some are able to keep at it and divert focus to the new breed.”
The Team
Nicolai Borcher Hansen is founding partner and Chief Investment Officer of Aros Capital Partners. Prior to this, he spent five years at Formuepleje, the largest privately owned asset manager in Denmark, managing USD 4bn in assets. He held the position of Senior Fund Manager responsible for equity strategy and jointly responsible for asset allocation. Before this, he spent four years as a Fund Manager at Sydinvest, a mutual fund under Sydbank, managing various equity mandates. He began his career as an investment adviser at Danish mortgage bank,
Nykredit. Nicolai has an MSc in Economics and International Business and is a part-time lecturer at Aarhus University, where he has taught Financial Risk Management and Portfolio Theory.
Peter Brink Madsen is a founding partner and Head of Fixed Income and Derivatives at Aros Capital Partners. Prior to this, he spent five years as a Fund Manager at Formuepleje, managing USD 4bn in assets. He started his career as a Fixed Income Analyst. He is also a lecturer at Aarhus Business School and a contributor to the book “Intelligent Hedge Fund Investing”.
Anders Lund Larsen is an analyst at Aros Capital Partners. He also joins from Formuepleje, where he was responsible for various equity sectors. He has a degree in MSc Finance, from Aarhus School of Business, and is a part-time lecturer in Modern Portfolio Theory. Anders has published several academic articles on dynamic asset allocation.
Christian Falster is a founding partner and CEO, responsible for institutional clients. Originally from Norway, he previously led the Scandinavian desk at FBR Capital Markets in London. He was educated at the Royal Naval Academy in Norway and graduated in finance from the University of Colorado.
Jacob Krogh Madsen is a founding partner and Head of Danish advisory office. Prior to this, he too worked at Formuepleje, focusing on Danish HNWs. He began his career as an investment advisor for Merrill Lynch in Luxembourg.
The four founding partners of Aros Capital are also joined by external investor Henrik Lind, who owns and operates Danske Commodities, a successful international electricity trading company, which was recently awarded “Growth Company of the Year” in Denmark. Henrik has committed capital to secure the formation of the Paradigm Fund and is a non-executive partner of Aros Capital Group.
THE BOARD
Aros Capital Partners has established a distinguished, independent and accessible Board of Non-Executive Directors. These consist of; Professor Salvino Busuttil, former Maltese Ambassador to France and Portugal; Walter Cutajar, MD of Avanzia Tax Advisors Ltd, one of Malta’s leading independent firms of tax advisers and Daniel Page, COO of Bedrock RealTime SA.