AIFMD-licensed Theta Capital is one of the oldest and most established investors in hedge funds in The Netherlands. Since 2001, the company offers individual bespoke hedge fund portfolios to select institutional investors.
In 2010, Theta launched the LEGENDS Fund making their services more broadly available. Legends Fund gives investors access to mostly closed elite hedge fund managers and offers daily liquidity. The Legends Fund provides daily valuations and is listed on Euronext Amsterdam. This offers a unique way to access leading hedge funds as shares can be traded daily at no minimum.
On average, the “Legends” have a 18 year track record and achieved net annualized returns of 15% (more than twice than MSCI World). They also offered real downside protection with a maximum drawdown of 14% vs. 54% for the MSCI World at half the volatility of equity markets. The Legends Fund achieved net returns of 7x the HFRX Global Hedge Fund Index since its inception in 2010.
Relying On Old-Fashioned Stock Picking, Lee Ainslie Reports His “Strongest Quarter” Ever
Most of these elite hedge funds are closed to new investors. Because Theta is a stable investor that invested with the Legends for more than 10 years, the firm is able to get capacity. The Legends Fund offers full transparency and alignment of interest, as Theta capital’s principals and shareholders are among the largest investors in the fund.
The fund has also a highly attractive fee structure, with just 62.5 BP management fee and 5% performance fee (with perpetual high water mark). On top, investors benefit from competitive fees & rebates with underlying managers.
Ruud Smets, who has been managing hedge fund portfolios at Theta since 2005, believes that going forward the opportunity set is very compelling as buy & hold “is over”. Also in 2015 (to August), the Legends Fund is delivering positive performance while equity markets are substantially down and government bonds are flat. A lot is going on for hedge funds to capitalize on and for Legends Fund to continue to outperform.
Legends Fund Offers Daily Access To A Portfolio Of Mostly Closed Hedge Fund Legends Since 2010
In this Opalesque.TV BACKSTAGE video, Ruud speaks about:
- What defines a “Hedge Fund Legend”?
- What makes Legends Fund so unique?
- What has been the performance of the underlying Legends, individually and as a blended portfolio?
- How is Risk Management done at Legends Fund?
- How can the Fund offer daily valuations, when the hedge funds aren’t?
Ruud Smets, CAIA, is the portfolio manager of the Legends Funds. He obtained his master degrees in Investment Theory and Information Technology from Tilburg University in 2002 and is a Chartered Alternative Investment Analyst (CAIA). Ruud joined Theta in 2005 and serves in the role of portfolio manager for the various Theta products. He has performed in depth due diligence on hundreds of hedge funds over the years.