The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
The fund will charge 1.5% management and 20% performance fees, and starts with assets of $14 million as a joint venture between Artradis and Russia-based Martin Diggle.
The fund will focus on investments pivotal in the rebuilding of Russia. It is expected to have high volatility of 25%+. Long positions on selected Russian stocks will be hedged by allocating 5% of the fund to purchase protection, probably via options, which are reasonably cheap and fairly priced. In Russia single-stock options are available on the leading companies, and index options are plentiful. In addition to Russia, the fund is likely to have exposure in Ukraine and will also look at Kazakhstan.
Martin Diggle is the CIO based in Moscow, where he will seek out investments. He has previously lived there for nine years having worked as a partner at a company named Brunswick that was taken over by UBS.
His brother Steve Diggle will act as risk manager, and carry out the trading and portfolio construction. Additionally, settlement and clearing will take place in Singapore. Steve Diggle is the Singapore-based managing partner of Artradis Fund Management, the relative-value strategy which in five years has risen to become one of AsiaÆs biggest and most successful hedge funds. Starting with $4 million, it now has almost $900 million in assets under management in its Barracuda and AB2 Funds, with another $40 million in its long/short funds. Steve Diggle told AsianInvestor, in an in-depth interview to be published in our March edition, that the Barracuda fund is likely to be closed to new investments soon.
With regard to the Russia fund, Steve Diggle says, ôWe believe the Russian oil story is largely over, as the discounts that existed for Russian oil companies compared to global oil companies have contracted substantially. However, a large percentage of those oil revenues have gone to the government and have not been spent yet, so we will be looking at investment opportunities with infrastructure, such as pipelines, bridges, and railways and may selectively short the energy companies.ö
The fundÆs service providers are UBS as prime broker, Deacons as lawyer and HSBC as fund administrator.
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