Partners Group to spin out hedge clone unit

Swiss alternative asset manager Partners Group said on December 14 it will spin out its hedge fund replication business next month as it focuses on private equity, private real estate and other unlisted markets.

Partners, which manages more than 24bn Swiss francs in assets, said the alternative beta strategies team, headed by Lars Jaeger, will buy a minority stake in the unit while Partners will retain a majority stake.

The alternative beta strategies team runs approximately 200m Swiss francs in funds that use derivatives and other techniques to try to reproduce the performance of hedge funds but at a much lower cost. Products created by the method are often called hedge fund clones.

“We’re strengthening our focus on private markets and this is no longer core,” a spokeswoman said. “For the team … it’s a better set-up for them … they will be independent.”

Partners’ decision comes after a tough period for the hedge fund industry, which delivered record poor performance in 2008 and has seen heavy client outflows, although there are signs investors are tentatively returning.

The spokeswoman said there were no current plans to list the business.