NEW YORK (HedgeWorld.com)–Hedge fund firm Ramius Capital Group and Munich-based HypoVereinsbank plan to combine their fund of funds activities. Ramius managing member Thomas W. Strauss will oversee the joint operation out of New York.
“What’s driving this is a desire on our respective parts to provide clients all over the world with the best investment product possible,” said Mr. Strauss. “We think critical mass and scale in this business permits you to build more in-depth resources to accomplish that.”
Both HVB and Ramius have funds with various investment objectives. The partnership is expected to start operating on Jan. 1, 2004, with combined assets of approximately US$3 billion. “It’ll be an integrated investment process, with distribution driven from both Europe and the U.S.,” said Mr. Strauss.
Ramius managers are well known to their European counterparts at HVB. Four years ago, Bank Austria took an almost 25% equity stake in Ramius and HVB subsequently acquired Bank Austria. “This is an extension of that relationship,” says Mr. Strauss.
Ramius manages US$4 billion in total assets. Of this, US$1 billion is in fund of funds. In addition, the firm has US$2 billion in multi-strategy funds, but this is not part of the joint venture with HVB.
Separately, it also runs US$1 billion in single-strategy hedge funds in merger arbitrage, distressed securities, convertible arbitrage, long/short equity, real estate and mortgage lending. The firm specializes in low-volatility absolute return products with annual returns of 5% to 10% above a risk-free rate.
Mr. Strauss joined Ramius in 1995, when he became partners with Peter A. Cohen and Morgan B. Stark in the investment management business. Previously, he was at Salomon Brothers Inc., where he held various positions, and at Granite Capital International Group, where he developed an absolute return business.
HVB has a large distribution network, and the joint business will provide products to clients in Europe. There will be an office in London, and Ramius has one in Tokyo.
Both institutions want to further develop their fund of funds business as demand is expected to grow. Germany is introducing new regulation at the beginning of next year, making hedge funds available to investors in that country .