Bryan Borgia founded Topwater Capital Partners in 2002 as one of the first risk-based managed account platforms in the hedge fund industry.
In this Opalesque.TV interview, we learn about the genesis and advantages of the Topwater model, which allocates pools of capital into managed accounts for portfolio managers or traders to run unique deal terms. Managers bring risk capital to the account which sits in a first-first position, first to absorb losses and first to recoup those losses. In return for that position Topwater offers much higher than normal industry standard payouts to the managers.
Currently one of the largest risk-based managed account platforms, Topwater constantly studies its universe of over 2300 managers, attracting talented traders and managers who have an identifiable edge to take money out of the market by offering a higher than normal payout, while providing lower volatility for investors through the managed account and risk-based structure.
According to Bryan, recent hedge fund industry trends such as an institutional bias toward larger managers and also barriers of entry for smaller managers, all favor the Topwater model because they create a deeper talent pool of talented managers looking for capital. Bryan sees Topwater as a way of aligning interest for investors and managers, as institutions can access emerging managers’ niche alpha by allocating to Topwater and their understanding of emerging managers, and portfolio managers and traders can gain access to capital and create an identifiable institutional track record.
In addition, learn about:
* Applying “active due diligence” in monitoring manager performance
* Post 2008 Industry Momentum Provides Deep Talent Pools
* How Risk Based Managed Accounts differ from seeding
* The Case By Case Search for Managers with an identifiable edge
* Accelerating the Due Diligence process with managers willing to commit risk capital
* Portfolio construction is not an edge
* “Aligning interest” for both institutional investors and managers
Bryan Borgia:
Bryan Borgia co-founded Topwater in 2002 and is primarily responsible for finding, evaluating, and recruiting hedge fund managers for its customized managed account programs. Additionally he is responsible for deal negotiation and the structuring of these accounts. Mr. Borgia graduated from Middlebury College with a degree in Economics and was a member of the school’s Alpine Ski Team. Mr. Borgia is an active member of the NY Century Road Club (Category 2 Cyclist) and currently resides in Weston, CT, with his wife and three kids.
