Acquisitive alternative fund incubator Ascalon Capital Managers is setting its sights on adding to its stable of managers, notably in Greater China, after taking a stake in a global equity hedge fund.
Sydney-based Ascalon recently added to its range of Australian partners by acquiring a 35% stake in Morphic Asset Management, which had A$50 million ($46.46 million) in assets under management as at press time. Financial details of the transaction were not disclosed.
Ascalon is wholly owned by Westpac Banking Corporation. As is its style, it has taken a stake in Morphic and immediately invested into its flagship global opportunities fund.
“While we have a range of equity managers in our portfolio, Morphic AM’s fund is for now our only global equity strategy and hence fits well with our existing partner managers,” noted Chan.
Morphic is the fourth manager in Australia that Ascalon has partnered, alongside long/short manager Regal Funds Management, specialist Australian equities house Alleron Investment Management and relative value manager Above the Index Asset Management.
Chuak Chan, Ascalon’s Hong Kong-based chief executive, says the next move by Morphic will be to launch a Cayman Islands fund in a drive to attract institutional investors outside of Australia, including pension funds and family offices.
Ascalon has also invested in Singapore-based Asian fixed income long/short firm RV Capital Management and Hong Kong-based event-driven/merger arbitrage manager Athos Capital.
Chan tells AsianInvestor that Ascalon is interested in partnering more managers, noting that those specialising in Greater China would be of particular appeal.
"The prospect of getting exposure to A-shares has recently been made easier by the Hong Kong-Shanghai Stock Connect programme, hence a Greater China long-short manager makes sense, given the lack of such a strategy in Ascalon's existing portfolio of managers," he says. He stresses, however, that Ascalon would not restrict itself to China-focused managers.
Sydney-based global equity long/short manager Morphic Asset Management was co-founded in 2012 by Jack Lowenstein and Chad Slater. It now has a six-strong team.
Its global opportunities fund is distributed to high-net-worth individuals and retail investors in Australia with a minimum investment of A$10,000. The Ascalon deal will enable the firm to distribute the fund outside the country.
While its global opportunities fund takes long and short positions across 20 to 60 equities, it also invests in fixed income, commodities, credit, currencies, listed derivatives and exchange-traded funds.
Morphic’s pre-tax net return as at the end of June was 5.82% for three months, 0.61% for six months and 20.84% for one year. The fund’s benchmark, the MSCI All Country World Index (AUD), returned 3.15%, 0.64% and 19.24% over the same period.
Prior to setting up Morphic, Lowenstein was deputy chief investment officer and deputy chairman of Sydney-based Hunter Hall Investment Management from 1997 until late 2011.
“The strength of the Ascalon team’s support services, particularly their distribution capability, is central to our growth going forward,” Lowenstein said.
Slater was portfolio manager and head of currency and macroeconomics at Hunter Hall from 2007 to 2012.