West Palm Beach (HedgeCo.net) – I recently conducted an interview with Colleen Sorrentino, CIO, and Charles M. Wright, CFA, of FoHF’s Advanced Strategies II, LP (AS II) as part of a manager interview to be featured on our HedgeCo.net Manager Database. I thought to publish some excerpts in advance.

On the topic of the FoHF’s positive 5 year track record, Wright said, "Our goal is to achieve 75 to 80% in the bull market and we have met that through the history of the fund, beating the S&P 500 about 8.54% last year. Our 5 year track record Feb 2004-2009 beat the S&P 500 by 35%."

As a multi-strategy fund with $36 million under management, a 1.50% management fee and a minimum initial investment of $250,000, AS II recently celebrated its 5 year track record this February.

"We are not afraid of volatility and our edge is in our long-short policy, we don’t use leverage as much as other funds." Sorrentino said, "AS II is a great fit for family offices, institution investors, foundations and high net worth individuals."

"Our strategy is combination of art and science," Sorrentino continued, "We put a lot of time into into our managers and their selection in order to generate maximum return. We are not a hot fund, moving from manager to manager, we do complete background checks at the start, following up with a focus on due diligence, meeting on site on an annual basis as well as with independent advisers."

AS II stays away from over-leveraged funds, with no leverage at the fund level. "We do not place money with hedge funds that invest a substantial portion of their assets in esoteric investments such as derivatives, structured investment vehicles, CDOs, or managers that utilize black box quantitative models. We have been managing funds of hedge fund portfolios since 1992. The Firm’s partners and employees maintain a substantial stake in AS II." the FoHF’s website states.

AS II’s parent company, Wall Street Access Advanced Strategies LLC (WSAAS), has been managing fund of hedge funds portfolios for over 15 years. WSAAS is also an affiliate of Wall Street Access, which is a New York Stock Exchange member. G&S Fund Services is Fund Administrator.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

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Tags: art and science, background checks, cdos, due diligence, fund-portfolios, high-net-worth-individuals, independent advisers, leveraged funds, management-fee, manager database, manager interview, maximum return, minimum initial investment, palm-beach, quantitative models, sorrentino, strategy-fund, structured investment vehicles, substantial stake, west palm beach

NEW YORK, N.Y. – SecondMarket, the largest marketplace for illiquid assets, announced today that it has launched markets for mortgage-backed securities (MBS), whole loans, and collateralized debt obligations (CDO).  Through SecondMarket, buyers and sellers are able to trade these assets in a robust, centralized marketplace that provides transparency, price discovery and an extensive network of market participants.

“Today, the multi-trillion-dollar MBS, whole loans and CDO secondary markets are nearly frozen.  For the global economy to recover, it is critical to unfreeze these assets from the balance sheets of financial institutions around the world and restart the securitization markets,” said SecondMarket CEO Barry Silbert.  “The most effective solution lies in a time-tested model – an organized, independent secondary marketplace that provides transparency and price discovery.”

Through its online trading and auction platform, proprietary matching algorithm and deep network of relationships, SecondMarket has successfully established itself as a trusted marketplace for a variety of illiquid asset classes since its founding in 2004, including auction-rate securities, bankruptcy claims, limited partnership interests, and restricted securities and blocks in small capitalization companies.

SecondMarket’s trading network includes 2,500 buyers and sellers, hundreds of whom have already expressed an interest in purchasing residential and commercial MBS, CDOs, and portfolios of various whole loans, including residential, commercial, construction, consumer and industrial loans.  To date, more than $1 billion in illiquid assets have already been traded over SecondMarket.

Due to the esoteric and opaque nature of many of these assets, pricing is extremely difficult.  In an effort to improve investors’ abilities to determine the value of these assets, SecondMarket is providing unparalleled transparency by aggregating data on MBS, whole loans and CDOs and offering it for free to SecondMarket participants.  SecondMarket also has established a network of third-party service providers – the SecondMarket Ecosystem – to offer valuation, research, data, analytics, legal and transaction advisory services.

Bill Seidman, former chairman of the FDIC and Resolution Trust Corporation (RTC) and advisor to SecondMarket, endorsed the SecondMarket model.  “When we were working with troubled bank assets during the S&L crisis, we were forced to do a lot of work to create a market for these assets,” said Seidman.  “Had there been a SecondMarket when I was at the RTC, I would have jumped at using their platform.”

The SecondMarket online marketplace and auction platform is expected to serve as a complementary market to assist the efforts being undertaken to address the legacy asset problem by governments in the U.S. and abroad.  “We applaud the federal government’s initial efforts to address the legacy assets and restart the securitization markets,” Silbert said, “and an independent, active secondary marketplace is essential to bolster those efforts.”   

SecondMarket is also pleased to announce that it has hired two former Credit Suisse directors to lead its efforts in these asset classes.  Elton Wells, previously a Director with Credit Suisse in their Structured Products Group, will head SecondMarket’s MBS and whole loans markets and Adrian Radulescu, formerly a Director with Credit Suisse and Head of the European Leveraged Finance CDO Structuring Desk in London, will head SecondMarket’s CDO market.

“Over the past six months, SecondMarket has been diligently and expeditiously preparing for the launch of these markets by hiring dozens of employees, expanding our technology capabilities and developing key industry relationships,” said Silbert.  “We are confident that our efforts will result in transparency, liquidity, a functioning secondary market for the so-called ‘legacy’ assets and, consequently, the restart of the securitization market.”

About SecondMarket

Founded in 2004, New York-based SecondMarket (member FINRA | MSRB | SIPC) is the world’s largest marketplace for illiquid assets, such as auction-rate securities, bankruptcy claims, collateralized debt obligations, residential and commercial mortgage-backed securities, limited partnership interests, restricted securities and blocks in small capitalization companies, and whole loans.  SecondMarket has 2,500 participants, including global financial institutions, hedge funds, private equity firms, mutual funds, corporations and other institutional and accredited investors that collectively manage over $500 billion in assets available for investment.  For more information, visit www.SecondMarket.com.

Tags: asset-classes, auction platform, auction-rate, capitalization companies, cdos, centralized marketplace, collateralized-debt-obligations, global-economy, illiquid-assets, industrial loans, market participants, mortgage backed securities, partnership interests, price-discovery, restricted securities, s trading, secondary marketplace, secondary markets, securitization markets, silbert