APG-backed hedge fund incubator expands

IMQubator, the emerging manager fund of funds backed by APG, will establish an international capital introduction network, as part of a plan to attract institutional investors in addition to the Dutch giant.

APG has backed IMQubator since IMQubator’s establishment in 2009. The chief executive of IMQubator, Jeroen Tielman, says in the next three months institutional investors from the Middle East, Asia and Europe will assemble in Amsterdam to meet APG.

APG, which is the asset manager for the €235 billion ABP, has a seat on IMQubator’s investment committee, which is also open to up to four new investors, providing they commit between $25 million and $50 million.

APG allocated funds to IMQubator from its innovation bucket, which makes up 2 per cent of the fund.

IMQubator provides capital to hedge fund managers in return for a stake in the hedge fund company and reduced management fees, around 1 and 15.

The capital provides an important asset for hedge funds in start-up phase. IMQubator has seeded nine managers, which have expertise in a variety of hedge fund strategies, and a tenth is imminent. IMQubator claims to be leading the charge for the new generation of alternative investment management.

Tielman says restoring “the balance of power” is a condition of seeding.

“The seeding phase is the only moment in the business lifecycle when a business is really open,” he says. “Hedge funds have the opportunity to listen to investors. It’s an opportunity to change the governance of hedge funds.”

While Tielman says pressure on fees is important, it is also worth recognising hedge fund management is skill based.

IMQubator focuses on managers with talent, entrepreneurial skills and passion that have concentrated, specialist, pure strategies, and where risk management and control are a natural element.

The company also recently partnered with Hong-Kong based multi-manager firm Synergy Fund Management to source and seed Asia-Pacific managers.

Synergy and IMQubator will form a business development advisory alliance with a focus on China and Japan. Synergy will source Asian managers, while IMQubator will advise Synergy on seeding and accelerating hedge fund managers.