Funds of Hedge Funds were once the exclusive province of sophisticated institutions and ultra hight net worth investors. SkyBridge Capital sees no reason why this should be the case.
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Please visit our Multimedia Page to watch Managing Partner Anthony Scaramucci discuss SkyBridge Capital on the one year anniversary of its aquisition of Citigroup Alternative Investments' fund of funds group.
Editor's Note: Please read the attached Important Information document for performance information concerning the SkyBridge Multi-Advisor Hedge Fund Portfolios LLC ("Series G") registered investment fund and SkyBridge assets under management or advisement information.
SkyBridge Capital is aggressively expanding into new markets and products at a time when most of its competitors are rationalising their business in the wake of huge outflows
Anthony Scaramucci clearly believes fortune favours the brave. SkyBridge Capital, the $7.4 billion hedge fund investment business, founded by Scaramucci in 2005, is aggressively expanding at a time when most of its competitors are battling investor scepticism and capital outflow.
Last year SkyBridge surprised the hedge fund community with its acquisition of Citigroup's fund of hedge funds (FoHFs) business. The deal quadrupled SkyBridge's asset base and transformed it into a broad-based hedge fund business with multiple product lines and a highly respected investment team. SkyBridge also gained a flagship FoHF that has solidly outperformed its peers over the past three years, recovering from a loss of 19.6% in 2008 with returns of 22% in 2009 and 17% last year.
The Citi deal puts SkyBridge in position to benefit from the projected growth of institutional allocations to hedge funds, says Scaramucci. "There is tremendous demand for our services among the pensions community. The average pension plan doesn't have the resources to research, build and monitor a hedge fund portfolio internally. They need outside help."
SkyBridge recently hired Peter Carey to run SkyBridge Direct, a division that builds and manages custom portfolios for pension plans and other large investors. He was previously head of absolute return strategies at the New York State Common Retirement Fund and is credited with leading its move into direct investments in hedge funds.
SkyBridge has also created an advisory business to provide independent allocation advice and research to investors who choose to build and run hedge fund portfolios internally.
"We recognise the need to reshape the way we deliver services for the institutional marketplace," says Scaramucci. "Our business is about providing access to hedge funds. Too many of our competitors are focused on one thing: selling a FoHF. We are providing a range of different services that facilitate access to hedge funds."
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Managing partner Anthony Scaramucci says fast-growing alternative asset manager will offer a unique value-added product, or die trying
Hedge fund conferences are typically organized by media organizations or industry trade groups. A gathering held by an alternative asset management organization itself is likely to be modest in size, lightly publicized if at all, and with a fairly narrow agenda and roster of speakers. Competitors may, or may not, be allowed to attend.
The SkyBridge Alternatives (SALT) Conference is SkyBridge Capital's effort to break the mold for a hedge-fund event sponsored by an industry player. In only its third year, speakers scheduled for this May's SALT conference include former U.S. President George W. Bush, Secretary of State Colin Powell and U.K. Prime Minister Gordon Brown, in addition to an assembly of asset management executives. The event, to be held at the Bellagio in Las Vegas, is promoted on a splashy website and is open to firms who may help SkyBridge's business, as well as its competitors.
"We want to be in the thought leadership business. Set up the conference and bring the smartest people in," SkyBridge Managing Partner Anthony Scaramucci told Markets Media in a Jan. 24 interview at his office in midtown Manhattan. "We invite all the fund of funds, all the hedge fund seeders. Every one of our competitors gets an invitation to come to the conference."
The SALT Conference is reflective of the ethos of SkyBridge, led by Scaramucci and fellow managing partners Ray Nolte and Scott Prince: fast-growing, ambitious, and possibly above all, different.
"Do you like vanilla? We like vanilla as an ice cream. We don't like vanilla as a business," Scaramucci said. "It's a good ice cream, but do you want to be a vanilla guy? We don't want to be vanilla guys."
SkyBridge was founded in 2005 and had about $7.44 billion in total assets under advisement or management as of January 2011. The firm's four business lines are hedge fund advisory, which spans $5.36 billion of assets; co-mingled fund of funds and custom portfolios, encompassing a combined $1.48 billion; and hedge fund seeding, $601 million. About 70 percent of SkyBridge's assets are institutional, compared with 30 percent retail; that has flip-flopped from a 35-65 mix in the company's early-days, Scaramucci said.
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