The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Hindsight was established in 2005 and its first fund was the Hindsight Asia fund, which now has assets of $100 million. That multi-asset fund that focuses on long/short equity, relative value, convertible bonds and event driven trading was up 21% in 2007.
Volatility, which was 11%, was mostly due to the fundÆs underlying fundamental approach across the different asset classes, which allowed the fund to take on more directional exposure throughout all the sub-strategies than a classic multi-strategy vehicle. The net result of the implementation of HindsightÆs new plans will be to reduce the volatility to lower levels of around 5-7%.
Included in assets under management is a $75 million managed account that concentrates on Asian long/short equity ex-Japan and India. That account returned 50.5% in 2007.
Mindful of this, the Hindsight Equity Focus Fund was established earlier this year. That fund now has assets of $7 million with a target of $500 million. Target returns are 25% on volatility of 20%. Leverage is a maximum 300% delta-adjusted and net exposure will be approximately 0% to 60%.
Following on soon will be the Hindsight Convertible Fund. This will be a low volatility fund targeting returns of 10-15% with maximum leverage of five times. This fund will invest in convertible bonds, equity and credit-related options. Foreign exchange exposure will be mitigated via options, as is currently being done in the flagship Hindsight Asia fund. This is essentially the same strategy as the convertible strategy within the Hindsight Asia Fund. The convertible strategy returned 10% with a volatility of 4% in 2007, and year-to-date the same strategy is up 2% with volatility unchanged at 4%.
Fees for both funds include a management fee of 2% and performance fee of 20%.
The trades that the Equity Focus Fund and Convertible Fund undertake will also be up-streamed on a pro-rata to the flagship Hindsight Asia Fund. Jointly, they will account for about 80% of the trades in that fund. The remaining 20% of trading in that fund will be measures that provide insurance and volatility reduction, with the aim of bringing down volatility to, ideally, the 5-7% level.
Lead managing the Convertible Fund will be Yin Man Tang, who handles all derivative and arbitrage strategies. Prior to co-founding Hindsight, he worked at hedge fund GLG Partners.
Leading the Equity Focus fund will be Man Wing Chung, who manages long/short strategies for the firm. Before Hindsight he used to work at JPMorgan Fleming Asset Management.
Rounding out the quartet of founders are CEO Jenkin Leung, who was managing director at Lehman Brothers where he was head of Hong Kong and China sales, and Rocco Paduano who handles risk at Hindsight. He formerly worked in prime broking at Goldman Sachs and Morgan Stanley.
Service providers for Hindsight are Morgan Stanley and Goldman Sachs as prime brokers and Fortis as administrator.
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