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Aetos Capital Registered Funds Take Off

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NEW YORK (–One of the few startup firms to register hedge funds, Aetos Capital’s fund registration became effective on Sept. 1.

The firm launched four registered hedge funds of funds this week, each representing a different strategy: Aetos Capital Multi-Strategy Arbitrage Fund, Aetos Capital Distressed Investment Strategies Fund, Aetos Capital Long/Short Strategies Fund and Aetos Capital Market Neutral Strategies Fund.

The multi-strategy arbitrage fund allocates to event-driven arbitrage, relative value arbitrage, convertible arbitrage and fixed-income arbitrage. The distressed fund invests in funds managing securities of companies in various levels of financial distress including bankruptcies, exchange offers, workouts, financial reorganizations and other credit-related situations.

Among more traditional hedge fund equity strategies, Aetos will focus on long/short and equity market-neutral strategies. The long/short strategies vehicle invests in funds that combine long positions in undervalued common stocks or corporate bonds with short positions in overvalued common stocks or corporate bonds. The market-neutral fund allocates to funds that are neutral to the market with respect to movements in stock and bond markets and also in position size and industry exposure.

Each fund of funds will raise US$50 million, with a minimum investment of US$1 million, according to the Aetos’ Aug. 26 Securities and Exchange Commission filing. Aetos currently manages US$420 million in assets in both segregated and commingled asset accounts. The firm initially filed its funds’ prospectuses with the SEC early this year.

Aetos began building up its hedge funds of funds capabilities in late 2001, hiring two university foundation executives. Jeffrey J. Mora joined in November from Northwestern University, while Anne Casscells, chief investment officer at Stanford Management Co. left Sept. 2001 to join the funds of funds startup in its San Francisco office.


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