Asia-focused hedge fund Asiya Investments is in the process of onboarding an Asia long/short equity team with the aim of launching a new strategy by October.
The alternatives manager is also looking at tapping European demand with the launch of a Ucits version of an existing Asia equity fund at the same time.
CEO Ahmad Al-Hamad told AsianInvestor that a new portfolio manager and his team – based in Hong Kong and India – are joining the firm from Asia-based hedge fund managers. He declined to name the new hires or the firms that they are joining from.
The firm, which is backed by the Kuwait Investment Authority (KIA), is headquartered in Dubai but its investment team is based in its Hong Kong office.
“Our aspiration is to launch with $100 million-plus” for the new strategy launch, said Al-Hamad, citing interest from US-based fund of hedge fund managers and endowments, as well as family offices in Asia. Asiya itself will also be a cornerstone investor in the new fund.
“We haven't targeted Europe - first-day investors tend to come from the US and Asia's family offices,” observed Al-Hamad.
If the $1 billion AUM manager succeeds in raising more than $100 million for the launch, that will see long/short Asia equity strategy become Asiya’s largest single strategy – outside of managed accounts which the firm runs for the likes of KIA.
Al-Hamad said that the firm would target European investors after launch at the same time as marketing a Ucits version of an existing Asia long-biased quantitative equity fund, also by October.
“The Ucits fund is going to be slightly customised to what our partners think the audience would like,” said Al-Hamad. The Asiya Emerging Asia Fund is being launched on Trium Capital’s Ireland-domiciled Ucits platform and seeded with $25 million of capital from Asiya.
“We’ve run a lot of [our] strategies primarily with principal capital” Al-Hamad said, and “now they have track records of three, four, five years with third-party capital and I think they’re right to take to market,” referring to the broader market that a Ucits fund will enable the firm to tap.
“Post-[global financial crisis], Asia really was not a focus area,” said Al-Hamad, who now sees interest coming back despite “bumps along the road” such as the recent market turmoil in China.
Stronger interest in Asia funds is backed up by Credit Suisse’s mid-year hedge fund investor sentiment survey, released on July 30. That survey found 36% of respondents reporting an appetite to allocate to Asia-focused long/short (L/S) equity in the second half of 2015 – ahead of Europe-focused L/S equity (34%) and US-focused L/S equity (31%).
Furthermore, the same survey found that Ucits funds are expected to see an increase in allocations among the 202 investors polled – with 26% anticipating allocations to Ucits funds in the second half of 2015, up from 22% in the first half of the year.
Asiya’s new hires come after the manager saw five Securities & Futures Commission-registered employees depart from the firm’s Hong Kong office this year. One new SFC-registered employee has joined the Hong Kong office this year.
“As in any investment team there is attrition and rotation” said Al-Hamad. “Primarily where that’s happened it’s been in the junior staff – we’ve had a lot of young colleagues who’ve gone off to business school, this year alone, three are going to business school.”
The firm has also seen leavers starting up their own hedge funds. Mohammed Ali-Reda left last year to launch Darkhorse Capital on hedge fund platform OP Investment Management, for example.
Asiya’s Ucits fund is the second to sign up to Trium’s Ucits platform, which is in turn a re-entry into the business for the firm. It initially launched a Ucits platform in 2009 – called LAUP or the Liquid Alpha Ucits Platform – which it sold to UBS in 2011.
Public market investments account for “just over $800 million” of Asiya’s AUM, Al-Hamad said, with the remainder made up from private market investments such as Asiya’s Asia Islamic Trade Finance Fund.