Mezzacappa Management has registered its first multi-strategy fund of funds with the Securities and Exchange Commission. The Mezzacappa Multistrategy Fund started with approximately USD50 million of initial capital from the firm, a market participant said. The fund is expected to take in external capital starting in the fourth quarter. It is designed for the institutional market with a USD1 million minimum investment, low volatility and a widely diversified pool of more than 30 underlying hedge funds, applicable for portable alpha strategies.
Although this is the firm's first multi-strategy fund, two of the principals, Lenore Petteruti and Robin Willoughby have managed multi-strategy funds in the past, while founder Damon Mezzacappa has invested in many of them as a private investor, noted John Mills, managing director in charge of marketing. "[The] speed at which multi-strategy mandates are getting approved is picking up" because there is an increasing demand for funds suitable for portable alpha strategies," said Mills. "We expect our assets in multi-strategy products to ultimately exceed USD1 billion because the scale of the market we're addressing is so large."
The firm, which manages USD822 million, recently added an analyst for the fund but does not plan on hiring more staffers for this fund in the near term, said Mills, declining to name the new hire. "We have the skills we need in house," he said. The fund carries a 1% management fee and a 10% performance fee and will have a high-water mark provision.
