GERMANY – Kay-Peter Tönnes, hedge fund specialist at Frankfurt asset management boutique Lupus alpha, is to leave to start his own business.

It’s the first loss of a portfolio manager in the firm’s five-and-a-half-year existence.

Lupus alpha said Tönnes, 43, was stepping down in mid-August. He left Metzler Asset Management in February 2003 to join Lupus alpha.

“Working with Kay was wonderful and together we achieved a lot. We wish him the best for his project,” said Ralf Lochmüller, chief executive of Lupus alpha.

Together with fellow asset manager Ulf Becker, Tönnes built up Lupus alpha’s ‘Alternative Solutions’ business. That business has taken in €2.6bn in assets, €200m of which are invested in German hedge funds.

Tönnes was also the manager of ‘Lupus alpha Dynamic Design’, one of the first German based single hedge funds to be launched after the products were legalised in January 2004.

Lupus alpha said the departure of Tönnes would have no effect on its alternatives business, which will continue to be led by Becker. It added that it was even planning to expand the alternatives team, which beyond Tönnes and Becker has six members.

Prior to the creation of the alternatives business, Lupus alpha specialised in European small and mid-cap equity mandates and has taken in €2.8bn in assets with those products. Assets from pension funds account for roughly 40% of Lupus alpha’s total €5.4bn under management.

Industry sources who declined to be named in Frankfurt agreed. “Tönnes’ departure is not really a blow. It is simply Lupus alpha’s first experience with turnover (of asset managers),” one well-placed source said.

However, Eckhard Sauren, a fund-of-hedge funds manager in Cologne, said Tönnes’ departure meant that his fund would cease investing in Lupus alpha Dynamic Design.