Since being founded in London as a hedge fund research firm, FRM has grown into one of the world’s leading hedge fund-of-funds.

To view FRM’s development, please click on date ranges in the above chart.

1991 - 1996

FRM was founded in 1991 by Blaine Tomlinson as a London-based private family office and hedge fund research consultancy. At the time, many viewed hedge funds as risky speculators and the investors were primarily high net worth individuals. Based on initial research, the firm believed that hedge funds were in fact very adept at downside risk management, and had risk and return characteristics that would make them attractive to institutional investors. During the early 1990s, the firm sought to develop one of the most extensive sets of quantitative tools and hedge fund databases in the industry. FRM was especially known for its work in understanding and classifying the drivers behind hedge fund returns, and how hedge funds could be combined in portfolios to meet risk and return objectives.

1997 - 1999

After six years as a research firm, in 1997, FRM began investing outside capital in portfolios of hedge funds and opened an office in Guernsey.  The firm’s first commingled product was designed to produce absolute returns with low volatility and little or no correlation to equity and fixed income markets.  While products with these goals are more common now, they were considered innovative at the time for combining sophisticated portfolio construction and manager selection to deliver hedge fund returns in a manner that reduced risk. In 1998 Goldman Sachs and FRM partnered to produce a seminal piece of research, “Hedge Funds Demystified”, one of the first papers to classify hedge funds and explain how they could be combined in ways that met the needs of institutions.  In 1999, FRM received its first investment from a major institution.

2000 - 2004

The year 2000 saw a number of milestones.  FRM partnered with Morgan Stanley Capital International (MSCI), the leading international index provider, to develop MSCI’s hedge fund indices.  MSCI turned to FRM for its well-developed hedge fund classification systems and databases.  Also, FRM opened an office in Japan, and launched the first of several funds to target specific hedge fund sectors.  FRM reached USD1 billion of assets under management in 2001, and opened offices in New York and Sydney.  In 2003, FRM began offering products to US investors, completing the creation of a global hedge fund investing and client service platform.  By 2004, assets had grown to USD10 billion.

During this period of growth, FRM invested heavily in its staff and investment infrastructure.  The firm developed several specialised groups to ensure deep expertise in each aspect of the hedge fund industry, which itself was growing rapidly in size and complexity.  In 2000 FRM created its Business Risk Group, becoming one of the first funds of funds with a team focused exclusively on operational risks at hedge funds.  FRM also created dedicated manager research teams to develop significant global experience in each hedge fund sector.

2005 - present

In 2005, Sumitomo Trust Bank acquired a 2.5% stake in FRM, solidifying an important partnership between the two firms. During 2005-2006, the firm launched additional portfolios in the equity, credit and trading sectors, building a wider product range for sophisticated investors. In 2007 the firm introduced its first publicly traded investment vehicle, FRM Credit Alpha Limited, followed by Diversified Alpha Limited in 2008. In 2008, FRM also launched FRM Capital Advisors to provide seed capital to early stage hedge fund managers.