Former Bain and Sagard Capital partners are launching a small-cap-focused hedge fund

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  • The former Bain & Co. and Sagard Capital executives Anil Shrivastava, Dan Friedberg, and Michael Braner are raising $400 million for a hedge fund called 325 Capital, sources told Business Insider.
  • The fund will make big bets on small public companies, according to a description on its LinkedIn page, which says the founders have worked together for more than 20 years developing the approach.
  • Hedge-fund launches in 2019 have been few and far between and outpaced by liquidations. This year has also lacked the massive launches of 2018, when Michael Gelband’s ExodusPoint and Daniel Sundheim’s D1 Capital both began trading with billions in client assets.
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After working on a hedge-fund strategy for two decades, Anil Shrivastava, Dan Friedberg, and Michael Braner are ready to set out on their own.

The former executives at Bain & Co. and, more recently, Sagard Capital are in the process of raising $400 million for their new hedge fund, called 325 Capital, sources told Business Insider. The fund plans to take big bets on small public companies, according to the firm’s LinkedIn page, with an activist tilt.

“We strive to collaborate with management teams and boards who are committed to driving long-term, fundamental value,” the LinkedIn page reads. “As lead shareholders, we support our portfolio by working from deeply researched facts, acting as discrete advisors or constructive board members, providing access to a network of relationships, and providing direct growth capital.”

Read more:The booming private market has some hedge funds spreading into private equity’s domain. Now a tug-of-war has broken out over talent.

The firm declined to comment on when the fund would begin trading. Sources told Business Insider the fundraising process was still in early stages. LinkedIn pages for Braner and Shrivastava show that they say the company started in March of this year. Friedberg has not updated his page yet.

This year has been a tough one for hedge-fund launches as the bar continues to rise for investors looking to go out on their own. Rising technology and compliance costs, as well as pricey data packages, have limited the pool of new funds, and more hedge funds have called it quits in 2019 than have launched.

Shrivastava, Friedberg, and Braner all worked together at Bain & Co. from 1997 to 2003, their LinkedIn pages show, before Braner left to join JB Investment Partners as a partner. Braner then left for Sagard Capital, the private-equity arm of Sagard Holdings that Friedberg founded in 2005 and was joined by Shrivastava there in 2012.

The $400 million fundraising target, if reached, would mark one of the bigger launches this year. So far this year, there are no reported funds in the pipeline that are anywhere close to the record $8 billion launch of Michael Gelband’s ExodusPoint last year.

Read more:Bridgewater’s Ray Dalio struggled with finding his successor. For billionaire hedge funders, it’s a growing concern.

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