Danish Firm Tees Up Hedge Funds
With the launch of its debut fund only weeks away, Danish startup Aros Capital already is looking ahead to its next hedge fund, as well as opportunities to seed outside managers.
On Nov. 2, the firm plans to start trading Aros Paradigm Fund, which will employ a dynamic-asset-allocation model to invest across global stocks and fixed-income instruments. The fund seeks a return of up to 12%. The manager intends to use conservative leverage and local currencies to minimize risk.
The fund is offering discounted fees, as well as favorable liquidity terms. The 1.25% management fee and 10% performance fee are significantly lower than the standard 2-and-20 fee structure. And Aros will allow investors to withdraw once a month with 30 days notice, compared to more-typical quarterly redemption policies.
The firm is marketing the fund to a wide array of European institutions, including pension funds, and expects to expand its fund-raising efforts to the U.S. in short order. Aros has lined up several sponsors, including Henrik Lind, best known for running a Danish electricity-trading firm called Danske Commodities.
Meanwhile, Aros is prepping a second hedge fund to kick off in the first quarter of 2010. The vehicle is expected to invest in small and mid-sized companies in poor countries. At the same time, the firm is scouting opportunities to incubate independent hedge fund management teams.
Most of Aros’ seven-person staff previously worked together at Denmark’s largest private asset manager, Formuepleje, which has about $4 billion under management. Founded in February 2009, Aros is led by chief executive Christian Falster and Nicolai Borcher Hansen, the firm’s investment chief.
Aros’ hedge fund-management business is run from a London outpost, while the firm’s Danish headquarters will operate more like a family office, managing money for 12-15 clients. The Danish operation is based in Aarhus, Denmark’s second-largest city, and overseen by Jakob Krogh Madsen.
Aros is set up as a true European Union establishment: Its debut fund is domiciled in Malta and the firm is registered with regulators in the U.K. and Denmark. European regulators are pushing managers to bring hedge funds onshore and, in exchange, are giving the fund shops wider latitude to market within the union’s 27 member countries.
HEDGE FUND ALERT: October 7, 2009, 5 Marine View Plaza, Suite 400, Hoboken NJ 07030. 201-659-1700