Baring Asset Management to launch Asia absolute return hedge fund
Baring Asset Management has announced plans to add the Baring Asia Strategic Fund, an equity multistrategy fund managed by the firm's Asian equity team, to its range of single strategy hedge funds on March 1.
The fund, which will be available to institutional and other professional investors, will invest in Asian equities excluding Japan, but including Australasia and India. The manager will adopt a range of investment techniques to deliver positive absolute returns for investors, targeting returns in excess of 20 per cent per annum with a maximum volatility of 15 per cent and a strict limit on the portfolio beta.
'The fund will allow investors to access the immense growth potential on offer in Asia, on a risk-adjusted basis,' says its manager, Adrian Au. 'The strategies employed will include thematic, directional, arbitrage, event-driven, pairs trading and other liquid investment strategies that can produce uncorrelated returns.
'The portfolio will consist of approximately 50 diversified positions. The aim is to create a relatively beta-neutral portfolio that is uncorrelated to the Asian markets and not dependent on directional bets.'
The Baring Asia Strategic Fund, which will be available in both US dollar and euro share classes, is domiciled in Ireland and listed on the Irish Stock Exchange. There will be an annual management fee of 1.75 per cent and a performance fee of 20 per cent, with a high water mark. The fund provides monthly liquidity with no lock-up. The minimum investment will be EUR125,000 or its equivalent in other currencies.
'The fund aims to capture the very high growth potential in Asia without taking an active bet on market direction,' says Paul Graham, head of alternatives business development and distribution at Baring Asset Management. 'We are simply leveraging off the expertise and track record of Adrian and our Hong Kong investment team. As Asian economies mature, we believe the fund will provide excellent opportunities for investors to access a wide variety of sources of alpha in markets across Asia.
'Although markets have been volatile recently, we continue to believe in the fundamental strength of the region. We believe an equity multi-strategy fund drawing on our proven research capabilities and top down calls is a very logical approach. It allows us the best opportunity to generate attractive risk adjusted returns and should appeal to investors seeking to invest in the region, without the high levels of beta that are typically associated with long/short Asian funds.
'Barings has a long history of investing in Asia, having covered the region from its base in Hong Kong for more than 30 years. Our fundamental research and stock-picking capability combined with dedicated hedge fund management provide an excellent opportunity to take advantage of the investment opportunities that exist in Asia.'
Baring Asset Management's business encompasses developed and emerging market equity, fixed income and multi-asset portfolio management services for institutions, retail investors and private individuals. It is part of the MassMutual Financial Group, a financial services group that includes Massachusetts Mutual, one of the largest US life insurance businesses.
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