The Top Small-Cap Focused Hedge Funds Charge Forward; Amass nearly $30 Billion in Equity Assets Under Management

January 7th, 2013
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The Top 50 Small-Cap focused hedge funds now manage $29.3 billion in U.S. equity assets, allocating nearly 70% of their assets, or $20.3 billion, to companies with market capitalizations that are less than $2 billion. To be eligible for the top 50 Small-Cap Hedge Fund List, a hedge fund must have more than 50% of its equity assets invested in small-cap companies.

The Top Small-Cap Hedge fund list is led by Pennsylvania-based TFS Capital LLC, New York-based Deerfield Management Co and Toronto-based West Face Capital. TFS Capital employs a quantitative focused long/short equity strategy, while Deerfield Management and West Face Capital specifically focus on Healthcare related and Event-Driven opportunities, respectively.

QVT Financial and Palo Alto Investors, both of which have been known to employ activist strategies against underperforming companies, are also near the top of the list. Daniel Gold’s QVT Financial, which employs convertible arbitrage, investment grade, and capital structure arbitrage techniques as well as various relative value-driven equity strategies, is #5 on the list. QVT manages $1,107 in US Equities, allocating 57.8% or $640M to small-cap companies. Mr. Gold formed QVT in 1992 as a proprietary trading group within Deutsche Bank AG. The firm became independent in 2003 when Gold led its spin-off from Deutsche, beating out the Volcker Rule by more than half a decade.

William Edwards’ growth focused Palo Alto Investors is ranked #6 on the top Small-Cap List. Palo Alto Investors manages $1,107 in US Equities, dedicating 62.9% or $638M to small-cap companies. The California-based firm focuses on healthcare and biotech stocks, typically concentrating its portfolio on 30 to 40 top stocks.

Ranking Methodology: The Top 50 Small-Cap Hedge Fund rankings are compiled on a quarterly basis using hedge fund firms’ overall U.S. equity assets under management. The Small-Cap list includes the top hedge funds that have more than 50% of their U.S. equity assets invested in U.S. listed small-cap companies, which have market capitalizations that are less than $2 billion. To view the Top Small-Cap Hedge Fund list in its entirety, please visit HedgeTracker’s Hedge Fund Portal..
For Detailed Investor Profiles on these Investors, click below:
Delaware Investments
Palo Alto Investors
QVT Financial
Related People: Corey Kosak; Daniel Gold; Dr. Anthony Yun; Julian Sale; Lars E. Bader; Tracy Fu; William Edwards; Yi Cen
Related Entities: Deutsche Bank; Lincoln National Corporation; Macquarie Group; Palo Alto Global Energy Fund LP; Palo Alto Healthcare Fund LP; Palo Alto Small Cap Fund LP; Palo Alto Technology Fund; QVT Financial LP; QVT Fund; QVT Hedge Fund; QVT Overseas
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News; Featured Reports

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