KGR Capital is to launch the first UK-listed Asian fund of hedge funds, the KGR
Absolute Return PCC Limited.
Dresdner Kleinwort Wasserstein is acting as Sponsor to the launch and Kleinwort Benson (Channel Islands) Fund Services Limited will be the Manager of the Guernsey incorporated, London-listed, closed-end investment company. Investment advice will be provided by KGR Capital (Hong Kong) Limited.
The company will invest in a multi-manager, multi-strategy portfolio of Asian hedge funds and will initially make allocations to about 30 funds, with an initial emphasis on long/short equity strategies. Approximately 40 per cent of the fund's initial exposure will be to Japanese strategies, with the rest allocated to other parts of Asia, including the rapidly- growing economies of Greater China, Korea and India.
The investment adviser is targeting annualised returns in excess of 12 per cent in sterling over the cycle, and is expecting volatility to be below 10 per cent.
KGR Capital launched its first specialist Asian fund of funds, the KGR Capital Asia Pacific Absolute Return Fund, in August 2003. Since then it has given initial investors a 10.47 per cent annualised return in US dollars, with a volatility of 4.11 per cent. KGR Absolute Return will have a number of the same managers, but will be targeting higher returns, will accept a higher level of overall risk, and will be hedged into sterling.
"This is the first UK-listed fund of Asian hedge funds offering daily liquidity to UK investors," says Mark White, formerly head of international institutional business for JPMorgan Fleming, and now a Director of KGR Capital. "KGR Capital Absolute Return offers UK taxpayers with an appetite for moderately high risk the ability to invest tax-efficiently in absolute return strategies within the vibrant economies of the Asia Pacific region whilst benefiting from our established research and risk management expertise".
KGR Capital Absolute Return is targeted at institutional investors, pension funds, and discretionary wealth managers.
The Board of KGR Absolute Return may, at its discretion, redeem up to 25 per cent of the issued shares of the Company on a six-monthly basis (commencing June 2007) at the prevailing net asset value. There will also be an ongoing buyback facility and the ability to issue new shares. These powers are designed to assist the Company's shares to trade at little or no discount, or at only a modest premium, to the underlying net asset value.
Background notes: KGR Capital is one of the leading specialists in Asian hedge funds, and is headquartered in Hong Kong. The company was formed in 2002 by John Knox, Nick George and Christopher Rampton, all of whom worked together for many years in Asia in senior roles at Jardine Fleming and JPMorgan. The company employs 11 professionals, and has offices in Hong Kong and London.
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