Chicago-based Advocate Asset Management, which is run by David Kudish and Mike Kimbarovsky, opened its multi-strategy fund to outside investors on April 1. The firm manages $105 million mostly in separate accounts, but decided to create a fund structure in October 2004 and seeded it internally. Kudish was formerly ceo and chairman of consulting firm Stratford Advisory Group, while Kimbarovsky was previously president of Hedge Fund Research.

Advocate is opening the fund to outside investors now because it has built a sufficient track record, said Kimbarovsky. It follows an absolute return strategy that invests across asset classes. It does not employ leverage or invest in direct currency overlays. The fund has a $500,000 investment minimum. There is a 1% management fee and a 20% performance fee and a 12-month lockup provision. The fund is being pitched to high-net-worth and non-profit investors. It will not take ERISA money; instead the firm offers separate accounts to these investors, said Kimbarovsky. This is because pensions prefer separate accounts for transparency reasons and would not be agreeable to the lockup, he added.

Advocate plans to close the fund when it hits $250 million to make sure operationally the firm can sustain further investment. The ultimate capacity could be from $1-2 billion because the investments are liquid and exchange-listed, noted Kimbarovsky.