By Nishant Kumar
MONACO, June 23 (Reuters) - European investor Knight Vinkewill start a new fund in September to open its activist hedgefund strategy to investors looking for daily liquidity andsmaller minimum investment, founder Eric Knight said on Tuesday.
Previously, the firm was open to a small group ofinstitutions putting $100 million or more each into its $1.1billion fund.
Activist investors aim to make money by buying shares ofcompanies and then pushing them to change their strategy. Thiscan include raising their dividend, a share buyback, spinningoff a division, or an outright sale of company.
Although a tiny part of the $3 trillion hedge fund industry,the often vocal criticism of management by activists attractspublicity and can improve share price performance.
"It's a model which is attracting a lot of attention becauseof the noise which you hear in the U.S. about activistinvestors," Knight said in an interview.
Assets managed by activist hedge funds have surged six-foldin the last 10 years to $120 billion, according to a study by the Alternative Investment Management Association.
"Many of the investors are now looking at Europe as the nextfrontier," Knight, who unveiled his plans to investors onTuesday evening at the Yacht Club de Monaco.
Attendees included wealthy individuals, family offices andendowments, all of whom could invest in the new fund thatrequires relatively lower minimum investment. Knight did notdisclose the amount but said it would be significantly lowerthan his main fund.
Founded in 2002, Knight Vinke's initial backers included theCalifornia Public Employees' Retirement System.
The firm is known for its activist bets on companies such asCarrefour, UBS Group and Royal Dutch Shell and takes concentrated bets on large companies.
The biggest single stock investment in the main fund, forexample, is worth more than $500 million, Knight said withoutdisclosing the company's name. He said Europe offers a fertilehunting ground for activist investors who are looking forchanges at companies through consensual approach.
The fund, which will invest in a handful of Knight's highconviction large-cap stock ideas, will not charge anyperformance fee and look to preserve capital by hedging andholding cash, unlike the main fund which remains invested allthe time.
Knight Vinke's main fund is up about 20 percent so far thisyear. By comparison, the Eurekahedge Hedge Fund Index has gained4.7 percent. (Editing by Grant McCool)
