FCA Capital Advisors to seed equity long/short hedge fund

The hedge fund seeding division of Financial Risk Management (FRM) has invested $50 million into equity long/short fund Varna Capital which plans to launch later this year.

FRM Capital Advisors (FCA), part of fund of hedge funds group (FoHF) FRM, said the fund would launch during the fourth quarter of 2010.

FCA will also provide strategic guidance to Varna is it grows.

The Cayman-domiciled fund will implement a value-focused, equity long/short strategy seeking to exploit event driven situations, structural market dislocations and identify hidden fundamental business value.

Varna will be headed by Svetlana Lee who will be based in New York. She previously managed an equity long/short fund at Citadel's PioneerPath new manager platform. She has also worked at Greenlight Capital, The Baupost Group and Perry Capital.

Patric de Gentile-Williams, chief operating officer at FCA, said the group invested in Varna because Lee had demonstrated herself to be "one of the best managers".

"Her performance in 2008 was good and in 2009 she made money, mainly through excellent risk management," said Gentile-Williams.

The fund's strategy was something FCA was familiar with. "I believe the fund will achieve and be able to sustain long-term risk adjusted returns," he added.

The fund wil be marketed to large pension funds, family offices and FoHFs.

Varna is FCA's sixth strategic investment since it began investing in 2008.

FRM manages $8.5 billion worldwide for institutional and other sophisticated investors.

FCA runs a seeding fund that makes investments in emerging alternative investment managers.