Old funds fuel fee earnings at Thames River
Thames River Capital, the London-based asset manager, increased earnings from fees by 44% in the 12 months to March 31 last year, thanks in part to healthy performance from some of its oldest hedge funds.
The firm took £129.7m (€88.2m) in fees across the period, 43.5% higher than the £90.4m it recorded in March 2006, while its operating profit showed a similar proportional increase, from £79.5m to £113.7m, according its most recent accounts filed at the UK's Companies House.
Thames River's previous reporting period ran from January 10, 2005 to March 31, 2006.
Among its hedge funds, fee intake was buoyed by returns of about 12% in the reporting period from the $1.2bn Hillside Apex fund, Thames River's 10-year old long/short credit portfolio, according to the aggregation of discrete monthly figures, which excluded a slight difference in returns caused by "compounding".
Compounding is the process whereby the change in the value of an investment over time is based not only on the initial amount invested, but also on past accumulated rises, or losses, of that investment.
The Nevsky Fund, an eight-year old emerging markets long/short equities portfolio, which is now part of Thames River's affiliate Nevsky Capital, made about 30% on figures excluding compounding.
Hillside Apex finished last year up 10.3%, according to figures from the group, but has fallen by 0.7% in the first half of this year. Nevsky made 29.8% last year but had fallen 2.8% this year to July 31.
In May the $13bn asset manager bolstered its 12-member credit team headed by Bernt Tallaksen by hiring Donal McGettigan as an economist from Citi Alternative Investments, and Felix Martin as an investment analyst, from the World Bank.
In addition to recruiting on the investment side of its business this year, the company also hired Mike Juraschek, a freelance consultant, as its sales manager in Germany in July, the same month it won Financial News' operational excellence award for fixed income hedge fund managers.
Nevsky Capital's long-only global emerging markets fund, managed by Martin Taylor and Nick Barnes, was entered its sixth year in June, and has returned 37.5% annualised since it launched.
Thames River's global equities products, of which Nevsky forms a part, is the company's largest area of activity, with about $4.7bn in four products. This is followed by two funds that invest in aggregate about $2.9bn in credit instruments globally, and its funds of hedge funds unit, which totals $2.5bn is shared between nine products.
In the reporting period to the end of March last year, Thames River Capital launched only one product, Warrior II, a fund of hedge funds, which made 5.7% in 2006, and about 8.2% to March 31 last year. It ended last year up 20.2%, but was off 1.4% in the first half of this year, including estimated performance for June. It now holds about $907m of clients' money.
Thames River Capital declined to comment on its results.
--write to dwalker@efinancialnews.com
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