Fund industry veterans Anders Jacobsen in London and Paul Thompson in Hong Kong plan to launch Galileo Capital Management in the first quarter of this year.
Headquartered in London and with operations in Hong Kong and Luxembourg, the firm will manage and raise capital for bespoke alternative asset funds. It will also provide advice on business-entry strategies into China, including sourcing suitable business partners and execution.
Principals Jacobsen and Thompson aim to launch three or four funds in the first six months and will make all products available in Asia.
Galileo's funds will aim to buy into very under-invested business sectors or improve on existing strategies and to offer a low correlation to traditional investments. The funds will look to give smooth 8-12% returns with low volatility and target institutions and high-net-worth distributors, which have been increasingly looking at alternatives, as AsianInvestor has reported.
Regional interest will vary depending on the strategy. "We tend to find there are certain markets that like lower-volatility, lower-return products -- particularly Japan," Thompson says. "If they really like the product, the [take-up] numbers can be significant in those markets."
Galileo will target Europe as the primary market and Asia more selectively, he adds. "Some of the products we'll be looking at probably aren't available in [Asia] yet, which is why we feel there'll be potential interest here," says Thompson. He says he expects to source at least 20-30% of assets from the region.
Fees will vary depending on the fund and its target return, he says, with many of the strategies likely to charge less than the traditional 2% management fee and 20% performance fee.
Galileo will look to issue retail versions of its strategies where it can, says Thompson. All the firm's funds will be Ucits-approved, he adds, but while they will not be high-risk-type products, some will not meet Ucits criteria.
He would not reveal the identity of the administrator or prime broker, only that the hedge fund will have several prime brokers.
Thompson has focused on the investment fund sector in Asia for the past 10 years. Most recently he was managing director of SGI Management in Hong Kong. Before that, he was the first foreign chief executive of a Chinese asset-management operation, having built Prudential's asset-management joint venture in China. Prior to that, Thompson led the development of the international investment funds business at Goldman Sachs in 1997-2001.
Since 1999, Jacobsen has been providing investment advisory, capital raising and fund structuring services for venture capital, private equity, mutual funds and hedge funds to clients in China, Europe and the US. Before 1999, he worked for over 10 years as a principal of Bankers Trust Investment Management in derivatives fund management in London and New York. Prior to that, he was director of the portfolio strategies group at Chase Manhattan Bank in London.