Frank Troise

Former proprietary trader Frank Troise, managing director of SoHo Capital, is playing it safe in the firm's first proprietary hedge fund, SoHo Capital Partners Fund I. The long/short equity fund, which was launched last week, is founded in a more vintage macro-based model that will take long positions in undervalued companies. Troise credits sources in the entertainment and technology industries for keeping him ahead of the curve. Among the manager's current favorites is Tyco International, as well as overseas companies, primarily in Korea, which he thinks is undervalued, India and Japan. The firm is focused on energy and other commodity themes and is eying timber-related companies.

The fund will take long positions on a few securities to eliminate turnover and increase transparency to investors. There will be no lock-up period, as private equity comprises less than 10% of the portfolio. On the minimum investment of $250,000, Troise's target is an 8% to 10% return.

A former New Yorker, Troise launched the fund after nearly a decade working as a registered investment advisor and consultant, resisting the trend to be a long-only shop and adopt a more opportunistic approach. Ideally, he would even prefer to shed the hedge fund label for "partnership."

"We don't want to pigeonhole the fund [through] a long-only mindset," he adds. "What we're doing different [is] relying on our returns and going back to a macro-based model."

Troise, who describes himself as a deep-value guy, says the hedge fund industry is witnessing a compression in the businesses that he intends to take advantage of. The question he asks is, "What better way to go to market when other firms are winding down."

Target investors will be limited – at least, initially – to high net-worth clients willing to bet on Troise. "We're not looking for folks to find us through fund of funds platforms," he says. "What we're bring to market is an approach and philosophy that will weather the storm. You can't put us in a box."