Fairfield joins Straits Lion to access Asian hedge fund market
Singaporean fund manager, Straits Lion Asset Management, has joined forces with Fairfield Greenwich Group, a $7 billion US-based alternative investment house, to create and distribute hedge fund products in Asia.
Straits Lion, which is 80% owned by Great Eastern Holdings, is one of Singapore's largest fund managers with $9.5 billion in assets under management.
The joint venture company, Fairfield Straits Lion (FSL), is 65% owned by Straits Lion and 35% owned by Fairfield Greenwich Limited (FGL), part of Fairfield Greenwich Group.
FSL aims to market Fairfield's existing suite of alternative investment products to Asian investors, and also to develop new hedge fund products through investments in Asian hedge fund managers.
"The joint venture gives us a unique opportunity to leverage Straits Lion Asset Management's investment expertise and distribution contacts in Asia, in concert with FGL's outstanding alternative asset management capabilities," says Norman Ip, Straits Lion's executive director.
Commenting on the choice of a Singaporean asset manager to spearhead Fairfield's foray into Asia, FGL partner Richard Landsberger recognises the Lion City for its world-class financial services infrastructure and rich pool of talented professionals. He comments, "The evolution of Singapore's capital markets and its forward-thinking regulatory environment has made the country an increasingly important base for regional hedge fund management activities."
Straits Lion's vice president, Tong Foo Cheong, has been appointed CEO of the new Singapore based company. Cheong say the marketing effort for alternative investment products will initially begin in Singapore and Malaysia where Straits Lion has the most contacts. He intends to approach private banks, high net-worth individuals, corporates and other institutional clients. However, Cheong notes that Fairfield has seen a keen interest in its products from Korea, Taiwan and Japan, and that these markets will also be targeted over time.
"We believe we're still in the early days of widespread deployment of financial assets into hedge funds in Asia, and are very enthusiastic for the significant opportunities for success this joint venture brings," says Robert Blum, FGL managing partner.
A major part of FSL's task will also be to make investments in Asian hedge funds. Cheong predicts that initially these investments will form a part of a global fund of hedge funds portfolio, and overtime develop into an Asian focused fund of hedge funds. While the search for managers will probably start in Singapore, Cheong says his mandate stretches throughout Asia and includes Japan.
In making investment decisions in Asia, Cheong intends to continue FGL's focus on developing relatively conservative low volatility, low leverage, liquid and fully transparent hedge fund products in Asia.
"For now we will not be investing in start-up managers, but are looking to invest in Asian hedge funds with a track record of at least 12 months. We feel this will still give us plenty of choice," says Cheong.
Cheong explains that the relationship between the FGL and Straits Lion developed when Straits Lion began investing in FGL's products. "We discovered FGL were interested to come to Asia, not just for marketing purposes but to make investments too, and then discussions between us began."
Cheong is currently looking to build up his team, and expects to establish a team of six within the next six months, with separate individuals to lead the marketing and hedge fund investment responsibilities.