A combination of Winton Capital, with assets of $8 Billion, one of the ten largest hedge funds in Europe, is combining with a listed fund of funds, Dexion Capital, to hopefully raise $195 Million with an initial public offering.
The funds are targeted for a listed single manager fund, with the funds raise due in the spring of 2007. They would like a London-based float, but listing rules currently prevent such a capital infusion for single manager funds.
Although David Harding, Winton’s founder, is also its managing director and major stakeholder, Dexion will be responsible for marketing and distribution, acting as the investment manager. The two firms have decided on a fee distribution, but are still analyzing the potential investment banks which are vying for share sponsorship.
Though planning to create a mirror image of the Winton Diversified Futures fund, the new entity will be marketed under the Dexion name. Winton is a managed futures fund that generated 17.8% returns in the prior year, while similar funds returned only about 4% in 2006.
Although Winton Capital has no current impact in the U.K., Japan, Switzerland, and the United States have embraced David Harding’s “system trader” approach to hedge fund management. The success of Man Group and a subsidiary, AHL, of which Harding is a co-founder, gives the Winton fund investor credibility.
Dexion, on the other hand, has always been a fund of funds entity and the new opportunity will be its initial single manager fund.
With around $2 Billion in its portfolio, it also offers a hedge fund advisory service, directed at the community of institutional investors.
This marriage of two differently focused funds could prove to be an attractive vehicle in the future if their projections are close to reality.