Cantor Fitzgerald is eyeing an expansion into hedge funds with plans to acquire both funds of hedge funds and single-manager teams.
The New York-based investment bank hopes to use its infrastructure and fund-raising capacity to attract talent. Cantor plans to buy one or two strategy-specific funds of funds over the next six months, Stephen Ardizzoni, head of the firm’s investment advisory business, told Bloomberg News, before seeking single-managers.
Ardizzoni said Cantor has already looked over as many as 75 managers over the past eight months and has “a couple” of potential acquisition targets in mid.
“The asset management space is still trying to get sure-footed,” he said. “There are gems out there that really do need institutional support.”
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To that end, Cantor will provide the hedge funds it acquires with infrastructure, technology and prime brokerage services. In addition, managers joining Cantor will have access to the firm’s 4,000 clients.
“For funds with less than $10 billion in assets, it is almost impossible to effectively raise institutional capital,” Ardizzoni told Bloomberg. “This is what has really created an opportunity set for us to strategically build an asset management business.”
After bringing on the fund of funds managers, Cantor may begin raising money to seed start-up hedge funds within the next six months to a year. And over the next one to three years, the firm will seek out single-managers to add to its platform. Ardizzioni said that Cantor would focus on former proprietary trading teams as well as teams spun off from investment banks or multi-strategy hedge funds. In particular, Ardizzioni told Bloomberg that the firm has its eye on specialist managers, among them directional credit, mortgage-backed and relative value credit managers.
Cantor’s is a leading name in the FX space. It established its Prime Brokerage division in 2009, and recently it was named the top ranking PB in the Annual Global Custodian Prime Brokerage Survey.