Hedgeco Investments (HCI) was formed as a joint venture between Holding Capital Asset Management, LLC (HCAM) and Hedgeco,LLC in 2006.

   

HCAM was created in early 2005 to discover, invest in, and support emerging hedge fund managers. HCAM is not a new idea, but rather the formalization of an investment method employed by private equity firm Holding Capital since 1989. In the unending search for quality money managers, Holding Capital had often met with foreign managers that would not take U.S. monies for fear of being mired in U.S bureaucracy, tax implications and other securities regulations. In order for Holding Capital to invest with such managers, they have, on occasion taken the initiative to create an onshore U.S. vehicle as a mirror fund to the foreign manager, taking on the obligation of U.S. tax accounting and other relevant regulations. In doing so, they created investment opportunities for themselves, as well as other U.S investors. HCAM is a formal effort to do more than create investment opportunities though; it is an endeavor to discover the best managers as early as possible, to incubate and support these managers and to help them grow strategically and operationally.

HCI's investment philosophy and its experience, both gleaned from Holding Capital's investments, is key to its competitive edge. The hedge fund seeding space is an area fast garnering interest from investors, but it is still considered relatively risky territory for most investors. A telling statistic in the 2006 Deutsche Bank Alternative Investment Survey revealed that whilst 75% of investors surveyed were willing to invest in a fund from day one, only 25% were willing to seed hedge funds. By contrast, HCI is an early mover in the seeding space with an open mind towards seeding managers without the impediment of institutional rules. In fact, HCI has invested in managers so early in their development that they had no fund infrastructure. The rationale is quite simple; most institutions want to participate in seed investing of funds but are bogged down by artificial rules that do not always make sense especially in the evaluation of a start-up fund. HCI can and will bypass those rules in its search for talent.

HCI is able to leverage relationships built in the hedge fund industry through HCAM's hedge fund investing experience as well as Hedgeco's access to a network of PR firms, web designers, broker/dealers, other third-party service providers, administrators, auditors, attorneys, hedge fund databases, and marketers. The result of this complementary partnership is a vehicle on which start-up managers can rely on from before inception through maturation.