Asset Alliance becomes a SPAC snack. Reminds us of similar tack from way back.
Jan 9th, 2008 | Filed under: Hedge Fund Industry TrendsThank you to those who emailed us questions for best-selling author Richard Bookstaber. We had a wide-ranging discussion with him Tuesday evening and will tell you more about his latest views tomorrow.
We were intrigued by a news item this morning about the reverse take-over of a publicly-traded company by Asset Alliance, an asset management firm holding minority positions in several small hedge fund firms. Asset Alliance’s business model (not dissimilar to RAB Capital, Front Point or Affiliated Managers Group) reminds us of the old Internet incubators of the late 1990s. This is not to suggest that manager incubators will suffer he same fate as their e-business cousins, since e-business incubators relied on “exit events” to make money. By contrast, these manager incubators receive ongoing cash flows from the management and performance fees of their managers (split roughly 50/50 in this case). It seems that manager incubators are in the game to build diversified asset management firms more quickly than if they were to hire their own portfolio managers, not just to cash out (although AMG’s near-IPO of AQR suggests top-of-the-market exits are always in vogue).
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[…] A hedge fund incubator goes public via a reverse merger. (All About Alpha) […]
[…] Halcyon days for SPACs? Halcyon Asset Management goes public in half-billion dollar reverse take-over of a “blank check” company. This, after another hedge fund manager Asset Alliance was taken over by another special purpose acquisition company Tailwind Capital last month (see related posting). Seems more and more hedge funds are having a big SPAC attack. […]