Victoire Brasil Investimentos (VBI) is establishing a specialist fund management company in Hong Kong with emerging markets specialist Aquico Wen.
The new 50/50 joint venture ‘Victoire Asia Investment’ (VAI) will be based in Hong Kong and headed by Wen who is joining VAI from Esemplia Emerging Markets – a Legg Mason affiliated firm – where he was founder and chief investment officer.
Victoire Asian Investment’s new long only equity fund will be investing primarily in a limited number of high quality small and mid-cap companies which VAI believes are significantly undervalued. It intends to focus on identifying opportunities in less well researched and less efficient segments, in higher growth, developing Asian markets. These include China, India, ASEAN and frontier markets.
Victoire Brasil Investimentos Managing Director Paulo Del Priore said that the joint venture and the appointment of Wen was the “logical conclusion” to the close personal and professional relationships they had established over the past 15 years and when Aquico worked closely with his partners at SSBCiti and Citigroup asset Management.
“Aquico’s outstanding knowledge and expertise in emerging markets will broaden and deepen our research capability and investment offering in Asian and global emerging market equities and will enhance our offer in a manner consistent with the values and investment methodologies for which Victoire Brasil Investimentos has become known,” said Del Priore.
Wen said, “I’m delighted to once again be working with the Victoire team in this exciting new venture not simply because they have established a significant and respected specialist asset management business but because we share common beliefs and values, based on mutual trust and respect”.
Victoire Brasil Investimentos is an independent investment management company based in São Paulo, Brazil, specializing in equity portfolio management for institutional and private investors.
Frank Frecentese was named global head of hedge fund research by Lyxor Asset Management, confirmed Mehdi Aliouat, a company spokesman.
Mr Frecentese is based in Lyxor’s New York office and reports to Lionel Erdely and Nicolas Gaussel, co-chief investment officers.
Mr Frecentese joined Lyxor in May as managing director and deputy global head of hedge fund research, Mr Aliouat confirmed. He replaced Dennis Heskel as the firm’s leader of global hedge fund research, overseeing teams in New York and throughout Asia and Europe, Mr Aliouat said. Mr Heskel will retire in October.
Mr Frecentese was previously managing director of global hedge fund investments, at Citi Private Bank.
All six Market Vectors Hedge Fund Beta Indices were negative in August, according to Market Vectors Index Solutions.
MV Emerging Markets L/S Equity Hedge Fund Beta Index was the worst performer with a return of -1.55 per cent, followed by MV Global L/S Equity Hedge Fund Beta Index (-1.53 per cent) and MV North America L/S Equity Hedge Fund Beta Index (-1.52 per cent).
The top performer was MV Global Event L/S Equity Hedge Fund Beta Index with return of -0.51 per cent, while MV Asia (Developed) L/S Equity Hedge Fund Beta Index and MV Western Europe L/S Equity Hedge Fund Beta Index returned -0.66 per cent and -0.98 per cent respectively.
The top performer was MV Global Event L/S Equity Hedge Fund Beta Index with return of -0.51 per cent, while MV Asia (Developed) L/S Equity Hedge Fund Beta Index and MV Western Europe L/S Equity Hedge Fund Beta Index returned -0.66 per cent and -0.98 per cent respectively.
As reported by the FT, in July, the Hong Kong fund industry regulator reported on the initial joint study with its Chinese counterparts concerning a mutual recognition fund platform. The six-month study focused on the compatibility of the two regulatory framework and concluded that both offered equal protection to investors. This is the first step in establishing a mutual recognition platform that allows qualifying funds in Hong Kong and China to be sold between the two jurisdictions and is an unprecedented step.
Initial details disclosed by the Hong Kong regulator include the requirement that Hong Kong-registered funds will also need to be domiciled in Hong Kong. This requirement has met with mixed responses from within the fund industry.
Potentially this mutual recognition initiative could allow international managers to sidestep requirements to establish an onshore presence in China via a joint venture in order to access the growing and already large Chinese savings market. In this context, asking managers to invest, by comparison, a small amount in establishing new funds in Hong Kong under local domicile is not particularly onerous. Managers will also need to be licensed and operate in Hong Kong.
The update on the mutual recognition platform followed the annual Fund Management Activities Survey organised by the Securities and Futures Commission. The survey reported that the fund management business in Hong Kong rebounded in 2012 to a record high of HK per cent12.58tn of assets under management and advice including funds managed within private banking and authorised Reits. This represents growth over 2011 of almost 40 per cent following a dip of 10.4 per cent the previous year. Only days earlier the Monetary Authority of Singapore (MAS) reported a record level of funds managed in the city for 2012 of S per cent1.63tn, an increase of 22 per cent over 2011. Significantly Singapore reported an 8 per cent increase in hedge fund assets to S per cent77.5bn. Singapore has been preferred by many hedge fund managers establishing a presence in Asia.
Asian equity markets kicked off September higher after two separate readings of Chinese factory activity confirmed hopes of a recovery in the world’s second-largest economy.
Japanese stocks jumped 1.4 per cent, Australia’s S&P ASX 200 hit a three-month high while the Shanghai Composite and South Korea’s Kospi both closed flat.
HSBC’s private survey of Chinese manufacturing activity crossed the key 50-level for the first time in four months in August, in line with last week’s flash reading. The data follows the government’s more bullish official purchasing manager’s index (PMI), which hit a sixteen month high in August.
China’s benchmark stock index closed just below the 2,100 mark after trading in negative territory for most of the session. The index notched up gains of over 3 per cent for the month of August as Asia’s best-performing index.
Australia’s benchmark index crossed the 5,170 mark to hit its highest levels since May 22 as investors cheered China’s economic recovery.
South Korea’s benchmark index erased earlier gains to fall below 1,930 points, retreating from a one-month high hit earlier in the session. A weak manufacturing report added to the weak sentiment. The HSBC/Markit purchasing managers index (PMI) rose to 47.5 in August, indicating a third straight month of contraction.
