Jupiter opens Asia Pacific hedge fund to external investors

The USD25m long/short Jupiter Asia Pacific Fund managed by Philip Ehrmann, which has been incubated since last December, initially as a paper portfolio and since April with internal seed money and friends and family funding, has been opened to external investment as of July 2.

Between April 2 and June 22 the net asset value of the fund, including fees such as the management charge and performance fee, has returned 15.75 per cent, according to its management company Jupiter Asset Management (Bermuda).

According to Jupiter, Ehrmann's investment process fuses bottom-up and top-down analysis to identify changes in sectors or companies in the Asia Pacific ex Japan region that will affect future earnings growth.

'We have identified a number of key themes for the portfolio at both the sector and macro level, including energy and commodities, emerging consumerism, environmental and infrastructure spending, competitive advantage, capital flows and valuation,' he says.

'The backdrop to Asia's markets remains benign. Although China's economy remains very strong, in part prompting the People's Bank of China to raise interest rates and reserve requirements in May, this is unlikely to affect growth elsewhere, as the measures were more targeted at the domestic A share market.

'Domestic demand and consumer sentiment is continuing to recover across the region with Malaysia and Korea beginning to show signs of improving growth and corporate earnings. While the volatility of Chinese shares will occasionally cast a shadow across markets, there is little to suggest that valuations across Asia are stretched, particularly as returns on equity remain high and capital management is improving via rising dividends and stock buybacks.'

The portfolio, which has an emphasis on mid-caps, currently holds 58 stocks. 40 of which are long positions. It has a net exposure of just under 70 per cent and gross exposure of 220 per cent. The fund has a minimum investment of GBP100,000, EUR100,000 or USD100,000.

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