Gary Vaughan-Smith, head of the alternative investment group at ABN Amro Asset Management from 2001 to 2006, and Alex Da Costa, erstwhile head of portfolio construction in the same division, are launching SilverStreet Capital, a London-based fund of funds group aimed at institutional clients, FTfm has reported.
The partnership has already attracted a $500 million mandate from a European financial conglomerate, making it one of the largest debuts of its kind. SilverStreet, which aims to launch its first fund of hedge funds by late summer, will adopt an equity market neutral strategy.
In spite of his move into the sector, Vaughan-Smith believes fund of fund fees, typically 1 percent a year and a 10 percent performance fee, are set to fall.
The Wall Street Journal, meanwhile, notes that SilverStreet is the latest in a growing number of hedge-fund startups settling in London. Assets managed by London-based hedge-fund managers totalled about $360 billion in 2006, up 40 percent from the year earlier, according to International Financial Services London, which was set up to promote London as a financial center.