Hedge fund posts 'for sale' sign on internet
A once-discreet hedge fund has posted its own version of a lonely hearts message on the internet, saying it would like to meet people to buy parts of the business and provide it with extra working capital.
Shane Rodgers, managing director of Signal Hill, posted a message on an industry website today seeking an "investor or a trader" to take a "small ownership stake" in the multi-strategy hedge fund firm adding that it was seeking another to provide a "small amount of working capital".
The firm, which said it was registered with the US Securities & Exchange Commission, said it was seeking the money to help it out until its first so-called managed account with a US institutional manager started producing cash for it. Managed accounts are structures where hedge funds offer to manage the money of very large investors in separate accounts to their off-the-shelf funds.
Rodgers, who could not be reached for comment, described the company as an "emerging US multi-strategy manager" and said this was a "unique opportunity for substantial income and capital gain" for the buyer. However, the purchaser should also be ready to bring money into Signal Hill's funds, which are predominantly model-driven portfolios.
Rodgers' advertisement noted: "Serious investment enquiries only."
Signal Hill's seeking of a stakeholder in its business comes as investment banks and other financial industry firms have bought stakes in hedge fund management firms. Investment bank Goldman Sachs last year launched the Petershill fund, which has since bought stakes in at least five hedge fund managers including London's Winton Capital Management, Capula Investment Management and Longacre Fund Management.
Morgan Stanley has acquired either stakes in, or the entire companies of, at least seven hedge fund managers since 2006, according to data from Jefferies Putnam Lovell. Merrill Lynch and Lehman Brothers have taken three stakes each, while Citi has bought one management firm.
Signal Hill's open request for extra working capital also follows a trend in the hedge fund industry where managers are increasingly considering getting loans from sources beyond traditional bank lenders, including hedge fund peers.
US asset manager SAC Capital Advisors hired staff in 2006 to build a business providing money to businesses, while Ableco Finance, a division of SAC's peer Cerberus Capital Management, provides loans to companies seeking working capital of between $15m and $1bn.
Signal Hill's funds invest in equities, currencies and commodities futures contracts among other instruments. The firm is planning to launch an asset-backed lending fund, and a fund that buys equity privately from publicly listed firms before the equity can be traded on public exchanges. Last October it announced it would launch an asset-backed lending fund with a real estate focus in conjunction with peer Tidewater Capital Partners.
-- Write to David Walker at dwalker@efinancialnews.com
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