Mandate
Large allocators face a structural problem: a strategy must be able to take a meaningful cheque to be worth the diligence, which excludes precisely those opportunities whose returns depend on being small. We are deliberately structured to invest where capacity is limited, and a significant part of our search is directed at strategies that would be uneconomic for a very large institution to consider.
Where capacity constraint creates opportunity
A strategy is capacity-constrained when the return depends on transacting in a market too shallow to absorb size without moving prices. That shallowness is usually a consequence of something structural — an instrument too complex for generalists, a jurisdiction with high operational friction, a market segment below the minimum size threshold of institutional participants, or a regulatory requirement that limits who may participate.
Those frictions are what keeps competition out, and therefore what keeps the return available. A manager who tells us their capacity-constrained strategy can absorb unlimited capital has misunderstood their own edge.
Areas of current interest
We are actively reviewing managers in several specialist areas. In credit, we are interested in smaller-ticket specialty lending, receivables and trade finance where underwriting is genuinely proprietary rather than intermediated, and in stressed and restructuring situations too small for the large distressed funds. In relative value, we look at basis and carry strategies in markets where regulatory capital requirements create persistent mispricing.
In equities, we are interested in small and micro-capitalisation strategies with real analytical depth, event-driven and special situations books where the catalyst is legal or structural rather than directional, and index and corporate-action driven strategies. We also review market-neutral strategies in markets that receive limited analyst coverage.
Beyond traditional categories we look at insurance-linked and reinsurance risk, litigation and legal finance, royalty and intellectual property income streams, commodity and physical-adjacent strategies with genuine operational expertise, and volatility strategies where the risk is defined and the tail is understood rather than sold.
What we are not looking for
We are not interested in strategies whose return is predominantly market exposure with a specialist label attached, strategies where the edge disappears under honest attribution, or structures where the underlying asset's illiquidity is being used to smooth reported volatility.
We are also cautious about strategies whose historical record was produced in a single, unusually favourable regime and has never been tested in another.
Geography
Our base is London and we review managers globally. We have particular interest in managers operating in markets where local presence and language are a genuine barrier to entry for larger allocators, provided the operational and legal framework meets our standards. Where a jurisdiction raises specific custody, enforcement or convertibility concerns, we will say so early rather than run a full process and decline at the end.
Introducing a strategy
If your strategy is capacity-constrained, we would rather hear from you early than after you have taken assets past the point where the edge works. A short description of the opportunity, why it persists, and your honest estimate of capacity is enough to begin.