The aim of IMQubator is to connect institutional investors with premium return potential of top asset management talent in a cost efficient, transparent and controlled risk environment. IMQubator offers a platform where investors can get exposure to the funds of emerging managers selected by IMQubator (through the IMQubator Multi Manager Fund) and an economic interest in the management company of those funds (through the IMQubator Participation Fund).
Institutional manager selection procedures are often evaluating managers on historical fund returns. The rule of thumb is often that a fund needs have at least 2 to 3 years of track to be considered. By definition, new managers setting up their own first fund cannot provide such a track and as a consequence fall outside the radar screen of most institutional investors.
IMQubator aligns the interests of talented asset managers with those of institutional pension investors in a unique and transparent manner.
Jeroen Tielman, CEO IMQ Investment Management B.V.
For institutional investors this can be a missed opportunity as early access to talented investment managers can provide premium returns as has been noted by Rajesh K. Aggarwal and Philippe Jorion in “The Performance of Emerging Hedge Fund Managers” (January 23, 2008). It is often the case that emerging investment managers use innovative investment strategies so early interaction with these managers contribute knowledge as well as returns for their institutional investors.
As there is often no track, IMQubator’s selection method focuses on the investment processes the manager uses to generate returns and protect against downside risks. The same also holds true for the analysis of back-&mid office, operations and fund governance structure.
Selecting the Initiatives
The selection of new initiatives is based on the most favourable expected long-term return-risk ratios for investors in the IMQubator fund. Each new manager that is selected can count on an investment of typically 25 million euros. The exact amount depends on various factors, including the type of underlying investments. The expectation is that every investment company in which IMQubator invests will be fully able to stand on its own feet after three to five years.
Guiding and Monitoring
Once selected, a new manager will be guided and closely monitored on a weekly basis by IMQ Investment Management as the manager of IMQubator. To ensure close monitoring IMQ Investment Management requires that the selected managers have their office in the same building as where IMQ Investment Management is located.
