Former Dexion Capital veteran Andrew Gale and DBS veteran Lee Ka Shao have received an allocation from the pension fund management firm APG to seed the launch of a new Asian focused macro hedge fund.
APG manages the assets of the USD270bn Dutch pension fund giant, ABP, known as the second largest pension fund in the world.
Cavenagh Capital will relocate to Amsterdam from Singapore and will launch the Cavenagh Asia Fund as a Luxembourg-domiciled fund on 1 July with USD40m.
Cavenagh aims to make uncorrelated returns by constructing a portfolio of trades with an asymmetric pay-off in Asian interest rates and currencies.
The fund focuses on the changing probabilities of events rather than trying to predict outcomes themselves. Investment decisions will be driven principally by top-down macro-economic and business cycle analyses and will be skilled based, not Beta-reliant, targeting returns of 15 to 20 per cent.
Gale (pictured) is the chief executive while Lee is the chief investment officer of the parent company, Cavenagh Capital.
Gale has 23 years of experience in financial markets. From September 2004 until October 2008 he worked with Dexion Capital in London, where he was responsible for product development and asset raising for Dexion’s London-listed closed end funds of hedge funds and third party funds. Prior to Dexion, Gale worked at Morgan Stanley in London and Singapore for more than 15 years.
Lee was at Abax Global Capital in Hong Kong (2007-08) where he managed macro positioning. Prior to Abax, Lee established and ran the principal strategies business as the managing director, central treasury unit of DBS from 2001 to 2007. He worked at JP Morgan from 1994 to 2001 with global markets trading as a market-maker and proprietary trader in currencies, rates and derivatives in Asia and developed markets.