James Bryson and Roland Hass outline the investment process and thinking behind the launch of their new multi-strategy fund focusing on Indonesia.
James Bryson and Roland Hass outline the investment process and thinking behind the launch of their new multi-strategy fund focusing on Indonesia.
HW: What is the background to your fund?
JB/RH: The name of the fund is Komodo fund, a Cayman Islands incorporated open-ended mutual fund. It is a multi-strategy Greater Indonesia Absolute Return fund. The Initial Offering Period ends on 31 October 2006 and the Fund launches on 1 November 2006, with expected AUM at launch of USD 5-10m.
The fund will not be listed on a stock exchange. The fund will be managed by HB Capital Partners, and assisted by its Indonesia-based Fund Advisor, PT HB Capital Indonesia. We (James Bryson and Roland Haas) are the principals of both the Manager and the Advisor. Collectively, we have 23 years experience of the Indonesian Capital Markets.
HW: Who are your service providers?
JB/RH: The Fund’s auditors are Ernst & Young; The fund’s legal counsel are Maples and Calder; The fund Administrator is RBC Dexia Trust Services Singapore Limited.
HW: How and where do you distribute the funds? What is the profile of your current and targeted client base?
JB/RH: The fund will mainly be distributed in Asia and Europe, and not to US investors. Initially, marketing will be done directly from the Jakarta office by the principals to both individuals and institutions. Concurrently, there will be marketing to Funds of Funds, private banks, and other investment advisors.
HW: What is the investment process of your funds?
JB/RH: The fund’s investment process will be largely research driven, with emphasis on stock-picking. The principals will take an active rather than passive approach to management. We also intend to be vocal advocates of good corporate governance and transparency, areas which still require significant improvement in Indonesia. At this stage we expected to be predominantly equities biased, but depending our strategic view we may also in the future invest both in debt securities and derivatives.
HW: How do you generate ideas for your funds and what is your approach to managing risk?
JB/RH: Our Investment Advisor’s ability to conduct frequent company visits as well as their access to a broad range of key economic decision-makers at both the macro and micro level, allows us to generate ideas and also to manage potential risks at the market and corporate level, more effectively than Managers without such local presence.
HW: Do you expect your performance or style to change going forward?
JB/RH: The Fund hopes to follow the successful track record of Roland Haas’ previously managed fund, the Indonesian Growth Fund. Komodo Fund’s style is not expected to change, but the new and developing Indonesian derivatives market will present opportunities that are currently not available.
HW: What is the attraction of Indonesia?
JB/RH: Macroeconomic conditions in Indonesia, the largest economy in Southeast Asia, are the best in a decade and improving. Market valuations relative to growth, are amongst the cheapest in the region, and the economy is insulated from a slowdown in world growth, relative to its peers.
When compared to the larger Asian and Emerging markets, Indonesia is under-researched, providing more opportunities for the disciplined stock-picker.
HW: What events do you expect to see in your sector in the year ahead and what differentiates you from other managers in your sector?
JB/RH: We do not expect the launch of similar multi-strategy, absolute return, dedicated single-country funds focusing on this market, and as such we remain alone in this sector.
HW: Do you have any plans for similar/other product launches in the near future?
JB/RH: No, we intend to concentrate fully on the successful launch and long-term success of Komodo fund. To that end, the managers have committed to invest at least 25% of any performance fees into the fund.
