Grosvenor Capital Management, LP
Grosvenor Capital Management is a global alternative asset manager with headquarters in Chicago and offices in New York, Los Angeles, Tokyo, Hong Kong, Seoul and London. In business since 1971 (as Grosvenor Partners), the firm pioneered the fund-of-funds or multi-manager approach and customized hedge and private equity funds.
Technically, Grosvenor Capital’s clients are the funds it advises and manages, but investors in those funds are generally institutional clients and very wealthy individuals and families. According to recent SEC data, a large chunk of these investors are overseas.
Grosvenor Capital Management Background
Founder Richard Elden is considered the father of the American fund-of-funds industry. Under his watch, the firm expanded from individual alternative portfolios to institutional asset management. As noted earlier, the firm is the first to offer customized hedge and private equity alternative funds.
In 2006, Elden left the firm to start Lakeview Investment Manager, where he could be an activist investor. (He died in 2018.) Michael Sacks took over the helm at Grosvenor Capital and remains its CEO. Through several entities, he owns a controlling interest in GCM Holdings, which is the principal owner of the Grosvenor Capital. Other shareholders include former and current employees.
Grosvenor Management Client Types and Minimum Account Sizes
As mentioned earlier, the firm’s clients are the funds it manages. Investors in these funds include high-net-worth individuals, investment companies, pooled investment vehicles, pension and profit-sharing plans, and state and municipal government entities.
The minimum for launching or maintaining a Customized GCMLP separate account is a whopping $100 million. The firm may waive or change these minimums at its discretion.
Services Offered by Grosvenor Capital Management
Grosvenor Capital’s primary business is advising and managing hedge and private equity funds worldwide. Its Commingled GCMLP Funds offer multi-strategy, credit-focused, equity-focused, macro-focused, commodity-focused and other specialty portfolios.
The firm also offers customized investment vehicles and separate accounts tailored to investor needs. Additionally, it provides advisory services on a non-discretionary basis, accounting and financial reporting services, administrative support services and client services.
Grosvenor Capital Management Investing Philosophy
With help from the research, portfolio management and risk management teams, the four members of Grosvenor Capital’s investment committee set the target percentage ranges for assets in particular investment strategies within underlying exposure categories. Portfolio managers then generally follow these guidelines when making recommendations.
The firm uses these investment strategies:
- Broadly diversified, multi-strategy
- Global long/short equity
- U.S. long/short equity
- Global macro
- Commodities
- Global credit
- Completion (weighted toward strategies underrepresented in clients’ portfolios)
- Hedge fund seeding
- Multi-asset class
- Private equity, real estate and infrastructure
- Labor impact
- Opportunistic (a blend of several of the strategies above)
Depending on the fund’s primary investment strategy, the firm assigns a strategy and sub-strategy to it. The sub-strategies for each strategy are:
- Credit Strategies
- Fundamental credit
- Structured credit
- Long-short credit
- Distressed credit
- Emerging market credit
- Specialist credit
- Relative Value Strategies
- Convertible arbitrage
- Fixed income arbitrage
- Option volatility arbitrage
- Diversified relative value
- Equity Strategies
- Directional equity
- Low-net equity
- Fundamental market neutral equity
- Activism
- Event driven
- Emerging market equity
- Specialist equity
- Quantitative Strategies
- Directional quantitative strategies
- Non-directional quantitative strategies
- Macro Strategies
- Diversified macro
- Emerging market macro
- Specialist macro
- Commodities Strategies
- Diversified commodities
- Specialist commodities
- Portfolio Hedging Strategies
- Dedicated short equities
- Dedicated short credit
- Volatility protection
- Opportunistic hedging
- Strategic Investments Group Strategies
- Direct investments
- Co-investments
- Private Markets Strategies
- Private equity
- Real estate
- Infrastructure
- Co-investment opportunities
- Secondary investments
Fees Under Grosvenor Capital Management
Grosvenor Capital provides fee schedules in each fund’s offering document, but generally, it charges a management fee based on a percentage of assets under management and/or a performance-based fee. The annual management fee may be up to 2%, may be on a tiered scale and may have a minimum. The performance-based fee may be up to 20% of capital appreciation or profits.
What to Watch Out For
Grosvenor Capital Management does not list any disclosures on its SEC-filed Form ADV.
Opening an Account With Grosvenor Capital Management
To contact Grosvenor Capital, call one of its offices, which are located around the globe. You can also send an email or visit the firm's headquarters in Chicago.
All information was accurate as of the writing of this article.
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