Advocate Asset Management recently rolled out its first limited partnership fund catering to accredited U.S. high-net-worth investors and not-for-profit foundations and endowments. Advocate Partners comes in response to clients’ demand for capital preservation, said Mike Kimbarovsky, principal, underscoring its low-volatility capital preservation strategy.
The absolute-return hedge fund, which is expected to launch with $250 million, has a $500,000 minimum investment and a one-year lockup. It is primarily domestic though it currently has a 25% international exposure to the Pacific Rim--Japan, Australia, New Zealand, Hong Kong, Singapore and South Korea-- and Eastern Europe. The fund targets basic materials including energy and metals and non-cyclical consumer staples to include firms such as Proctor & Gamble, Walgreen, Wal-Mart and Colgate-Palmolive.
Kimbarovsky said the effort is timely because consumer staples tend to do well in the recovery phase of the market. He underscored consumers’ nature to focus on basic goods as opposed to discretionary items in a slow-down economy, as well as the increased demand in natural materials from developing countries within the next ten years and added that fund allocation may change depending on market conditions. The fund has a 1% management fee and a 20% performance fee.
Chicago-based Advocate Asset Management is an absolute-return money manager.