Income Partners, a Hong Kong-based credit-focused asset manager, has launched the IP Asian Opportunities Fund, an event-driven fund with a focus on special-situations credit and related equity in Asia.
Deutsche Bank will provide structuring, technical and sales support to the manager, as well as contributing to the seeding of the fund.
Using an umbrella structure, the fund allows investors to allocate capital to either the flagship commingled Opportunities Fund I or to managed accounts and sub-funds holding single or multiple special-situations assets.
A large Hong Kong-based family office has already confirmed its participation as cornerstone investor in the fund with a commitment of $100 million, and Income Partners is looking to raise a total of $250 million to $300 million.
The investment horizon is five years, with a three-year re-investment period, and the manager is targeting returns of 20-30% over a medium- to longer-term time frame, says Jiffriy Chandra, chief investment officer for credit at Income Partners. The firm had indicated its plan to launch such a fund back in July, as reported by AsianInvestor.
Event-driven was the top-performing hedge fund strategy last year, according to both Eurekahedge and Hedge Fund Research, but what's the outlook for 2010? "Many of the opportunities in the private financing space have not even emerged yet," Chandra says. "There were a lot of deals structured with maturities coming due this year, next year and the year after," he adds "Those are the ones we're targeting."
Income Partners' funds are already offered through Deutsche Bank's dbX hedge fund platform, but the new venture will be a separate offering not placed on the platform, says Stefan Masuhr, Asia head of funds and managed investment solutions at the bank.
The manager has been trading with Deutsche since the 1997/1998 Asia financial crisis, and the bank is a key counterparty for liquid and illiquid credit investments, says Chandra.
"A lot of opportunities we are targeting include investments in the private-financing space, which was very active until the crisis [in 2008]," he tells AsianInvestor. "Of all the big global banks that are still active in this area, Deutsche Bank stands out for its consistency and continuity in sourcing primary assets and in the secondary market."
When looking at workout opportunities, it's important to have a global bank with a local banking presence, something Deutsche can offer, says Chandra. That enables managers to structure onshore transactions, provide onshore collateral, set up escrow accounts and so on -- services that are only possible with a local banking licence.
Deutsche will not only source distressed assets for IP's fund, but will provide services beyond that, including introducing its clients to the fund. The bank will act as technical services provider and placement agent for the umbrella fund. Income Partners will source assets from a wide range of deal originators, including Deutsche Bank.
Meanwhile, the firm's first equity product, a long-short fund launched in July with $20 million, is still in its incubation period. Income Partners wants to build a track record before it starts marketing the fund, most likely "towards the second half of the year", says Chandra. "The market's a bit volatile now, so it's hard for a long-short strategy to return good performance in the near term. But we are confident of making money down the road."
Income Partners was set up in 1993 and has offices in Hong Kong and Beijing, servicing institutional investors and family offices from Europe, North America and Asia.