Joint winner: Best seeding platform

When IMQ Investment Management launched its seeding platform, the IMQubator Multi Manager Fund in January 2009, CEO Jeroen Tielman says one of the most important qualities it brought to both investors and potential beneficiary hedge fund managers was a fresh approach.

“IMQubator is in a unique position in the hedge fund investment world,” he says. “We have no legacy of set contracts, traditional ways of doing things, old/bad investments et cetera.”

So far the seeder has committed capital of $345 million and since the summer of 2009 it has invested a total of €150 million ($206.61 million) in six funds and has a seventh lined up to invest in by the end of 2010. Investments so far include Branta Solutions, a long/short sustainability theme fund; Holland Private Equity, focussing on late-stage technology growth; Callanish, a systematic global macro fund, and Boston & Alexander which focuses on convertible arbitrage.

The platform invests $25 million in each of its funds and is not restricted to what strategies it can choose provided talented and specialised teams run them.

“The current market is offering us an abundance of available manager talent. IMQubator has the resources to exploit this situation and create lasting benefits for our investors: strong long-term funding, hedge fund competence and experience, strong network of experts, suppliers and investors, experience based processes and procedures for all aspects of selecting and managing managers,” notes Tielman.

While it is flexible on what it can invest in, the platform has some rules it will not bend, particularly when it comes to communication and transparency. This includes weekly chief investment officer (CIO) to CIO meetings and openness on investments.

One major requirement of IMQubator is that the emerging managers have the main part of their office located in the same building as IMQubator, Tielman explains. “This is not only instrumental to the total transparency of the emerging managers' investments but also makes the guiding and monitoring of the business and operational side of the emerging managers' management company more efficient,” he explains.

Transparency is passed onto investors. They receive access to the performance information of the underlying funds and aggregated portfolio level data.

“One of the primary ways of exploiting our advantageous position is to use the total transparency that is a absolute condition for considering an investment, to identify, measure and manage the risks inherent in hedge fund investment strategies on a detailed level and without time delay.”

IMQubator has a wealth of experience to assist its fledgling funds. Its four-person senior team has collectively over 80 years of experience in international financial markets. It typically looks to make investments on a horizon of three to five years. While that is a long time for investors to wait for returns, it gives emerging managers time and flexibility to grow and accelerate their businesses.

IMQubator charges a management fee of 50 basis points and a performance fee of 10% with a high watermark.

Jeroen Tielman, IMQ Investment Management