Altgate Capital is launching its first five hedge funds and plans to have another five out by the end of the first quarter. The firm opened its doors last year (DW, 10/30). The funds will employ strategies including long/short, merger arbitrage, event-driven, distressed debt and emerging market styles, said James Baker, chairman and a 25-year Goldman Sachs veteran. The funds, will be offered through third-party distribution channels including private banks and financial advisors and will carry standard fees of 1% management/20% performance. Total costs after factoring in those of the distributor will be around 2% management and 25% incentive, Baker said. Private client minimums will be $1 million for investment. The funds will be targeted toward small and medium-sized institutions and high-net-worth individuals. Altgate is presently looking for distribution channels. "We already have five hedge funds lined up for clients....Five will probably not be enough. By the end of the first quarter we will be offering at least 10," Baker said.
Baker, who is housed in Altgate's London office, said the company is weighing the option of opening an Altgate office in Switzerland to court private banks, but he noted no decisions will be made until the second half of 2001. New York-based Altgate Capital is also looking to hire people in both its London and New York offices, in research and sales, respectively.
