EJF Capital LLC is an investment advisory firm with more than $13 billion under management (AUM). It currently manages a total of 92 pooled investment vehicles, six of which are hedge funds. The firm currently employs 30 advisors.
It's important to understand that hedge funds are often complex, loosely regulated investments and therefore accessible to accredited investors. If you're looking for trusted and comprehensive support in managing your own finances, consider speaking to a professional financial advisor.
EJF Capital Background
EJF Capital is an alternative asset management firm with headquarters in Arlington, Virginia, outside of Washington D.C. EJF is an employee-owned firm. The firm manages assets across a wide variety of alternative asset strategies that specialize in the financial industry. The firm was founded in 2005 by Emanuel J. Friedman and Neal Wilson, along with a small team professionals from Friedman, Billings, Ramsey Group, Inc. (FBR). The firm and its subsidiaries have offices across the globe, in Arlington, Virginia; London, England; and Shanghai, China.
Before launching the firm, Friedman was the co-founder and CEO of FBR for more than 15 years. He has more than four decades of experience in the U.S securities industry. Wilson was a manager at FBR and had served as a branch chief with the SEC in Washington, D.C.
Friedman is EJF Capital's principal owner and co-CEO and owns approximately 61%. Wilson is co-CEO and owns approximately 19% of the firm. Other employees own approximately 20%.
EJF provides discretionary investment advisory services to pooled investment vehicles and single-investor funds. The firm serves as the manager for the funds and is responsible for the funds' trading and other day-to-day activities. In addition to its funds, the firm has separately managed account (SMA) clients and fund investors that include but are not limited to the following: foundations, trusts, estates, IRAs, retirement plans, funds of funds, endowments, pensions, profit-sharing plans, business entities, sovereign wealth funds, high-net-worth individuals and family offices. The minimum investment amount for investors in any of the funds is generally $100,000. In regards to the offshore funds, the minimum investment is mandated by law to be $100,000. There are different minimum investment amounts for other kinds of accounts and the firm and its affiliates reserve the right to waive the minimum at their discretion.
EJF Capital Investment Philosophy
EJF Capital has a variety of strategies, one or more of which is used for its portfolios: Fixed-Income Strategy, Public Equity Strategies, Private Equity Strategies, Non-Marketable Loan Strategies and Real Estate Strategies.
The Fixed-Income Strategy is designed to target attractive performance returns and produce long-term capital appreciation, or increase in value of assets, through direct and indirect investments in private and public debt markets. It uses debt, equity and hybrid investments in public and privately held companies.
The Public Equity Strategies are designed to pursue absolute returns, and achieve medium- to long-term capital appreciation from investments. The firm uses an equity long-short strategy for funds.
The Private Equity Strategies focus on equity and warrants; debt, hybrid debt securities and collateralized debt obligations; mortgage servicing rights; real estate-related loans and leases as well as cash and short-term investments.
The Non-Marketable Loan Strategies seek to earn interest income by providing financing to plaintiff law firms participating in mass tort litigation (actions brought against one or a few corporate defendants by a large number of people injured on a large scale) or similar litigation.
The Real Estate Strategies seek to invest in a wide variety of real estate and real estate-related investment opportunities.
Of course, all current and potential clients should be aware that no investment strategy can guarantee against risk of loss.
Largest Hedge Funds Managed by EJF Capital
EJF Debt Opportunities Master Fund, LP
- AUM: $3,798,471,541
- Minimum: $500,000
- Beneficial Owners: 282
EJF Debt Opportunities Master Fund II, LP
- AUM: $1,283,976,564
- Minimum: $1 million
- Beneficial Owners: 28
EJF Financial Services Fund, LP
- AUM: $159,542,462
- Minimum: $500,000
- Beneficial Owners: 48
EJF Income Fund Offshore, Ltd.
- AUM: $28,581,555
- Minimum: $200,000
- Beneficial Owners: 116
EJF Select Master Fund, SPC
- AUM: $721,511
- Minimum: $0
- Beneficial Owners: 3
Fees at EJF Capital
Clients typically pay an asset-based management fee for EJF advisory services. They also may pay a performance-based fee, usually at the end of the year and based on a percentage of the increase in the value of each client's investment.
For the funds, EJF is the investment advisor responsible and charges a maximum management fee of 2% based on AUM as well as a maximum performance-based fee of 20% in excess of the fund's profits, or 25% in excess of the fund's profits above a stated return amount. EJF Capital may agree to adjust and/or waive negotiated fees for a particular client in specific cases. Performance-based fees are negotiable.
Certain fund investors in particular asset classes of funds are subject to additional up-front fees of up to 2.5%, as well as ongoing fees of up to 0.5%, per year.
Beyond this, other additional fees and expenses may apply - including but not limited to registration fees, maintenance fees, certain taxes and regulatory expenses - so it is imperative that potential and existing clients read the offering documents carefully and reach out about specific fees charged to their fund.
The firm may also charge other fees for separately managed accounts (SMAs), wrap fee programs, etc. - so it is important to consult the firm about those services in particular.
What to Watch Out For
Again, it's important to understand that hedge funds are often complex, loosely regulated investments and therefore accessible only to accredited investors. Such investors differ from retail investors or individual investors, who might be taking a more DIY approach or enlisting the services of a financial advisor.
Within the past 10 years, EJF Capital has not undergone any disciplinary or legal action deemed material to a client’s evaluation of its business integrity. That said, as an SEC-registered investment manager, the firm is legally obligated to uphold its fiduciary duty and work in clients’ best interests at all times. You can view its latest Form ADV on the official website of the Securities & Exchange Commission (SEC).
Becoming a Client of EJF Capital
If you are an accredited investor and wish to become a client of EJF Capital, you can visit the firm's website or call (703) 875-9121.
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