Omnix Multistrategy Fund launched in Hong Kong earlier this summer with about $20 million of assets, with ex-Lehman veterans Paul Penkett and Stephen Cheng as joint portfolio managers. After recording a positive performance to date, they are about to start marketing for additional external investors.
"Trading Asia requires a dynamic approach towards managing risk, taking liquidity constraints of developing markets into consideration," says Penkett. "This approach will appeal to a broad array of non-passive investors who are looking to generate meaningful returns regardless of market direction. This strategy will allow for active asset allocation decision-making based on the opportunity set that is available."
The sub-strategies for the fund are directional long/short equity, credit long/short, convertible bonds and equity volatility. Target returns are 15-20% on 10% volatility.
"Being able to trade across asset classes allows us the flexibility and liquidity to identify areas of outperformance and underperformance," says Cheng. "It is important to identify what stage of the economic and market cycle we are in and to understand which investments work best within this context."
Penkett had been a managing director at Lehman Brothers for 13 years. Under him was a 15-strong team that focused on equity, credit and volatility strategies within the Asia-Pacific region.
Cheng was previously a managing director at the US bank as part of the equity strategies Asia proprietary group, where his main focus was on the trading and management of risks relating to credit and convertible strategies. Before joining Lehman, he was at UBS in Hong Kong from 1994 to 2007, where he ran Asia credit trading and fixed-income research for Asia-Pacific.
Carl O'Connell joined them as chief operating officer, having served as chief financial officer at DKR Oasis in Hong Kong from 2006. His primary responsibilities included accounting, operations, taxes, human resources and investor relations. From 2004 to 2006, he was CFO at TPG Axon in New York, where he helped launch a $5 billion global multi-strategy fund in three months and developed all key processes, controls, accounting systems and personnel.
Omnix management fees are currently 2% and performance fees 10%, but different fee structures may apply on future classes. Redemption terms are quarterly, with 45 days' notice.
The prime broker is Deutsche Bank, administrator Alter Domus and risk management consultancy QRMO.