Lionhart spins out Asian strategy fund

The investment team for the Lionhart multi-strategy Asia hedge fund set up a new management company in London and Hong Kong.
The managers of a $170 million Asia-focused multi-strategy hedge fund have spun off from their parent, Lionhart, and set up their own investment-management company called Cannizaro Capital Partners. The new company has also acquired LionhartÆs Hong Kong office and investment team.

Lionhart, based outside of London, was established in 1995 and manages three multi-strategy funds with a total of $650 million under management. Two of the funds are global in nature, while the Asian strategy fund was launched in 2000. Its style is low-volatility, multi-arbitrage investing. Its Asian fund returns 11-12% per annum with volatility below 3%; its standard deviation of monthly returns is 2.9 and its Sharpe ratio is 2.7. One of Lionhart's global strategy funds has a similar profile, while the otherÆs portfolio is more concentrated.

The Asia team wanted to run its own show. But instead of defecting to a rival or going separate ways, the members and LionhartÆs management agreed to spin out the Asian business. That way the Asia fund, called the Lionhart Asia Master Fund, will continue along with its track record, its service providers and its managers. Lionhart remains a client in the Asia fund, along with institutional investors and funds of funds globally.

ôWe are all in our mid-40s and have been trading in Asia for 20 years,ö says Alastair Altham, CannizaroÆs CEO in London. ôWe wanted to keep the team together, and keep the fund.ö

The fund, to be renamed the Cannizaro Asia Master Fund, will now be wholly owned by the Cannizaro team. Its CIO is Richard Howorth, while Alistair Lloyd and Robert Vergara are the other investment principals. Vergara runs the Hong Kong office, which is also being re-branded with the Cannizaro name, and provides investment advisory services to the fund. (Cannizaro is the name of a street and a park in Wimbledon where the firm is based.)

Cannizaro has also hired Stephen Wilson in London to serve as COO. Wilson is a hedge fund veteran who has also worked at Wharton Investment Management, Stratton Street Capital and Nomura International.

Altham says that while at some point the new firm may launch additional Asia-focused strategies, for the time being it wants to concentrate on managing the existing fund.
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