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Two men spend $400k to set up their hedge fund

It may be possible to rake in the big bucks working for a hedge fund, but APQ Partners – the hedge fund launched earlier this year by former GLG star traders Karim Abdel-Motaal and Bart Turtelboom – is proof that you have to spend money to make money.

Abdel-Motaal and Turtelboom launched APQ in January, taking over what was formerly known as Holland Park Capital, and immediately had to inject cash in order to meet regulatory requirements. The firm incurred a net loss of £164.2k during 2012, and had negative members’ interest of £9.6k – breaching the FCA rules that require at least €50k in capital – so the new partners had to shell out.

One member injected £58k in order to shore up the balance sheet, according to new filings for the firm on Companies House, and then another £200k to cover the hedge funds’ cost of capital.

Hedge fund members typically earn millions in a good year, but if the fund slips into the red then they’re liable. As Tim Wright, head of compensation for asset management at PwC told us previously: “If a hedge fund goes into the red, the partners are liable for the loss up to the value of their stake. Partners are also not classified as staff, so they have no employment rights if the company closes.”

APQ is focused on emerging markets and is one of the most hotly-anticipated hedge fund launches of 2013. It now has nine FCA approved employees, having persuaded former GLG staff to join earlier this year.

Wim Vandenhoek joined as a portfolio manager, while Lennart Kaltenbach and Tel Sandhu, both part of GLG’s emerging markets investment team, have also been swayed across. Maria O’Connor, who worked as a consultant focusing on product development and fund restructuring at Man Group, has also joined APQ Partners, as has Sohil Shah, who was formerly with Finnisterre Capital.

Comments (2)

  1. This is not news – $400k is well within normal hedge fund set-up expenses…

  2. Agree with HitmanH this is not newsworthy and is in range of typical start up cost – whilst the reg cap depends on the regulatory licence of the firm, consulting and legal bills can send the setup costs skywards – in addition there is cost for keeping even skeleton staff around while waiting for approval (time waiting for approval of course is itself an opportunity cost) and the cost of getting systems/processes in place necessary for regulatory requirements. 6 years ago a BIPRU125k firm cost over £500k to establish before a mandate was even signed and before our “consultants” became employees. This figure didn’t even include things like websites, branding, lease deposits (typically 12months for start ups), furniture, IT equipment etc. $400k set up – sounds like these guys did the math and realised it was a cost effective way of getting established.

    Larry Oatsmill Reply

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