Ascalon Capital Managers, an Australian alternatives fund incubator, has taken a 30% stake in Singapore-based RV Capital Management, which runs an Asian fixed income hedge fund.
The deal includes an investment into the firm’s Asia Opportunity Fund, launched last year by RV founders Ranodeb Roy, Morgan Stanley’s former Asia-Pacific head of fixed income trading, and Vickram Mangalgiri, a former adviser at Pimco.
The fund was reportedly up 21% last year and has assets under management of about $50 million. It takes long and short positions in Asian fixed income, aiming to gain from market dislocations in interest rate, foreign exchange and credit markets.
The financial terms of the deal were not disclosed.
This marks Ascalon’s third investment in an Asia-focused hedge fund manager, having previously taken stakes in Hong Kong-based Athos Capital, which runs an event-driven strategy, and Singapore’s Canning Park Capital, which operates a long/short equity fund.
It also owns a stake in Regal Park Funds Management, a Sydney-based long/short equity hedge fund manager.
Ascalon was drawn to the pedigree of RV’s team, its strong performance and its fixed income strategy, which offers some diversification from its other partner funds, says the firm’s chief executive, Chuak Chan.
“As we’ve got other equity managers, we had been looking in the non-equity space, and [RV] fits in really well,” he tells AsianInvestor.
He notes that while the operating environment is difficult for small managers, there are good-quality teams in the region. “We are seeking to add to our partnerships both in the Asia region and Australia,” adds Chan.
Industry executives are optimistic that 2013 will be a strong year for both hedge fund performance and capital inflows, following a bumpy 2012. Strong performance and inflows would, in turn, help to boost the bottom line of seeders, provided that their underlying hedge funds had good gains and grew their AUM.
Another seeder, FRM Capital Advisors, last month announced it had invested $25 million in Arena Capital, a Japan-focused long/short equity fund. It last seeded an Asian hedge fund in 2010.