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Falcon Seeding Solutions

05-December-2019
05-December-2019 12:51
in General
by Benny Menashe

 

Falcon are proud to announce that we have added our first Long Short Equity manager to our new First-Loss Model with a $10 Million allocation. 

Falcon’s First Loss Model

Falcon will be able to offer managers with equity-based strategies, day one capital through our first loss basis model. 

Our first loss platform is a collection of managed accounts where each account’s portfolio manager (“PM”) absorbs the losses up to a defined amount. The loss is absorbed by the PM posting an amount, typically 10% of their allocated trading capital, which can be thought of as collateral.

 In other words, if a PM wants a $100m account from a platform then they are responsible for allocating $10m with the remaining $90m being allocated by the platform. In theory, this $10m first loss tranche protects the investors from losses of up to 10%, as negative P&L is allocated to the manager’s capital first.

 Investors’ capital is only negatively impacted if losses exceed the manager’s $10m buffer. The managed account structure gives the platform the flexibility to pull accounts before losses of more than 10% are experienced, theoretically protecting investors.

 In return for absorbing losses, managers are typically very well compensated, with up to 70% performance fees.

 What we offer managers:

  •   Falcon will set up a separate account where we will contribute between 4-10 times the capital a portfolio manager brings (must be at least $1 million) at no added cost. 
  •  Falcon will help negotiate with top-tier service providers and counterparties.
  •  Managers are highly compensated for having collateral capital with the high monthly performance fee.

Falcon’s Customised Model

Falcon has the capability to customise capital raising models based on the portfolio manager’s and accommodate a variety of different strategies. 

To find out more about Falcon’s Solution, please e-mail: info@falconfundsolutions.com