Howel Thomas, the CEO of Wykeham Capital, will publicly launch the Wykeham Capital Asia Value Fund at the end of October with $2 million in capital.
Thomas worked at CLSA for nine years from 1996, ending as head of options and futures. He then spent five years developing residential apartments in Hong Kong before setting up Wykeham Capital to manage family and friends' money. The Asia Value Fund is now going to be open to external money.
It will be long-biased equities focusing on small and micro caps, but it will be deep-value rather than long/short. Although it will have the mandate to short stocks, it is not an activity that he is particularly intent on doing and he is more likely to go to cash in the event of over-valuation.
During the last 12 months, the fund is up 45%. It will run with about 15 to 20 stocks and at present the main sectoral concentrations are electronics manufacturing and consumer manufacturing (with 21% and 18% of the portfolio, respectively).
“Right now, I’d tend to be staying away from banks, financial institutions, real estate, and any heavily leveraged business,” says Thomas. “Corporate governance is an important factor. I avoid any company with questionable corporate governance.”
There is a 1% management fee and a 25% performance fee after a 6% annually reset hurdle with a high watermark. There is no lock-up, with quarterly redemptions on three months' notice.
The fund will get assistance on marketing and investment-idea swapping from Geomatrix, which will act as investment adviser. That is a name AsianInvestor readers are familiar with in connection with hedge fund manager Bob Howe’s Hong Kong-based Opera Pan-Asia Fund. The fund will receive back-office support from Jon Coleman at FAS (HK).
Deutsche Bank is the cash custodian, fund administrator is Swiss Financial, Cayman counsel is Walkers and Hong Kong counsel is Stephenson Harwood.