Theta Capital Management, a leading independent fund of hedge funds manager based in Amsterdam, the Netherlands, has launched Europe’s first public fund of hedge fund vehicle with a longer lock-up. Theta Deep Value Fund targets returns of 15-20% net of fees over a five-year investment horizon and in order to align manager interests with those of investors, its fee structure is fully geared toward performance. Investors in the fund are subject to a two-year lock-up period.

Theta Deep Value Fund was launched on 1 July 2006 whereby ‘seed’ investors subscribed for an initial round of EUR 40 million. Subsequently, Theta has opened this new and innovative fund to outside investors on 1 January 2007, accepting an additional EUR 30 million of capital. Going forward, Theta may selectively open the fund to new and existing investors, depending on the availability of investment opportunities that match the criteria for the Theta Deep Value Fund.

An increasing number of hedge fund managers are creating vehicles in their area of specialization where long term capital commitments will have the potential for higher returns. The investment strategies focus on situations where an event is likely, but where the timing of entry and exit points is difficult to determine. This calls for capital which is committed for a longer period and less sensitive to intermediate volatility. Theta Deep Value Fund was created to capture the investment opportunities that present themselves in these less liquid investment strategies, whose common denominator is their “hockey stick” or option-like return profile.

Wouter ten Brinke, Theta Capital Management: “Most market participants overpay for being able to trade in and out of their hedge fund investments, which means that investors willing to take a longer term view can get an attractive premium for illiquidity. Also, since the investment strategies in the Theta Deep Value Fund are predominantly taking non-systematic (non-market) risk, the fund is an excellent diversification tool in any traditional investment portfolio. We run a concentrated portfolio of around 10 hedge funds, based on our belief that concentration helps to create wealth and diversification helps to keep it. So far, the fund has proven its upside return potential, generating a net return of 10% during its first 3 months of full investment.”

Please click here for a brochure of Theta Deep Value Fund.

For further information:
Wouter B. ten Brinke, CFA           +31 20 5722 735           
tenbrinke@thetacapital.com

Profile: Theta Capital Management
Theta Capital Management B.V. is an independent investment boutique dedicated to the growth and preservation of client capital and focusing exclusively on hedge funds. Founded in 2001, the company is located in Amsterdam, the Netherlands. Theta currently manages over EUR 55o million in hedge fund assets across a broad range of funds of hedge funds and customized accounts. Theta’s investment philosophy is implemented by means of a structured research-driven investment process, where decisions are made with a healthy dose of common sense and expert judgment. This is the blend of art & science in our approach to hedge fund investing. For more information: www.thetacapital.com.