This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Hedge Fund Report: Picking a Winner

To participate in the hedge fund bonanza, you can manage a fund, run a fund of funds, or arrange financing for people you think can do it better.

That last approach -- providing seed capital to new managers without necessarily investing in their portfolio -- is the route SkyBridge Capital has chosen with a big-name partner, Michael Dell. The rewards in this semi-obscure line of work can be big, as seed-capital providers usually end up with a cut of a hedge fund's management fee.

SkyBridge Capital is a seeding firm created last year by Anthony Scaramucci, co-founder of Oscar Capital, a hedge fund acquired in 2001 by Neuberger Berman; and Andrew Klein, co-founder of Soleil Securities Group. The firm signed up its first two managers last week.

Dell participates in SkyBridge's business via his MSD Capital, which is to say, with his own money. With more than $10 billion under management, the eight-year-old MSD is not a rookie player in hedge fund investing. MSD is run by Glenn Fuhrman, former head of Goldman Sachs' (GS ) Special Investments Group, and by John Phelan, a former principal at Ed Lampert's ESL Partners. The wealth management shop has invested money with top-notch managers including ESL.

A classic example of a successful seeder is Julian Robertson, founder of Tiger Management, who discovered giant talents such as Maverick Capital's Lee Ainslee or Lone Pine Capital's Stephen Mandel, the so called "Tiger cubs" who used to work with him.

More modern types include FrontPoint Partners, said to be a potential acquisition target for Morgan Stanley (MS), and Paloma Partners, whose back-office operations have recently been acquired by JP Morgan (JPM - Get Report). The fact that big investment banks eye these operations shows that they are a growing and significant part of the hedge fund landscape.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MSC $15.58 -0.32%
GY $0.00 0.00%
JEF $0.00 0.00%
JPM $56.42 -2.30%
GOOG $669.71 -2.00%


Chart of I:DJI
DOW 15,906.11 -298.86 -1.84%
S&P 500 1,833.23 -46.82 -2.49%
NASDAQ 4,222.5850 -140.5590 -3.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs