Singapore-based Fairfield Straits Lion has announced a third addition to its Asian hedge fund platform. The new investment sees FSL adding a China-focused fund to its portfolio through a partnership with Apex Capital, a Greater China equity long/short specialist.
FSL declined to reveal the amount invested in the new fund, although it did confirm the deal involved both the investment of seed capital and a sharing of the economics of the new fund.
Earlier this year the Fairfield Greenwich and Straits Lion joint venture invested $20 million in a partnership with Asian arb fund Ludgate Hill, and $25 million in the Ajia-RMPH Asian equity long/short fund.
The portfolio for the Fairfield Apex Greater China Equity Fund will be co-managed by Apex's Tat Au Yeung and Chung Lew out of Apex's Hong Kong and New York offices, respectively. The managers each have over 20 years of global equities trading experience. Prior to joining Apex to launch its China hedge fund, Tat was head of HSBC's trading desk in Hong Kong.
Chung was most recently head of international trading at US Trust in New York. Apex's risk management is conducted by Avi Faliks, a founder of Apex Capital Management.
The fund's strategy is to generate returns with a low average net exposure to the market through opportunistic trading in the Greater China area via three primary trading strategies; cross border trading, directional trading and core long/short investments.
FSL's CEO, Tong Foo Cheong says, "The Apex team's experience and robust risk management is well suited to FSL's platform. Our investors desire conservatively managed, low relative volatility, low correlation hedge fund products."
Apex's existing fund, the Apex-Guotai Junan Greater China Fund has returned 4.9% for the first seven months of 2005.
FSL notes that Apex's dual offices in Hong Kong and New York give the fund 24 hour trading capabilities and put it in a good position to capitalize on cross border trading opportunities. Apex also has a strategic partnership with mainland investment bank Guotai Junan Securities, which is a leading underwriter of A-shares and has a 10% plus market share for B shares. FSL believes this tie-up will give the Apex team an informational edge as the Chinese capital market continues to expand.
Commenting on the outlook for his strategy, Tat Au Yeung says, "China's recent relaxation of its currency underscores our thesis that economic growth and market liberalization in the Greater China area will continue to create compelling trading opportunities. Historically, Apex has been able to capitalize on the divergence in pricing and sentiments between markets, exploit short-term price inefficiencies, and increase returns during market trends."