Maestro Capital, a Singapore-based global CTA fund launched in May 2003 has formed a strategic relationship with the asset management arm of Jefferies Group, a US-based global investment bank.
As part of the partnership, Jefferies Asset Management (JAM) will provide strategic and economic support to Maestro in exchange for a share of the fund's performance fees.
Says Maestro CEO Nick Delf, "JAM will provide strategic assistance on the capital raising front, particularly by introducing us to their US-based institutional investor cliental, a sector we have little exposure to at the moment. The structure of the partnership ensures it is in both our interests to raise capital as quickly as possible."
As part of the agreement, Jefferies will also invest an initial sum of $10 million of proprietary capital with Maestro.
"This will be run through a managed account, with Jefferies investing more funds over time," says Delf.
He adds, "We'd been looking out for a strategic partner that could help us grow assets, but wanted to be careful to make the right choice." He says he has known the principals at Jefferies for many years.
Bradford Klein, co-president of JAM comments, "In Maestro we found an early-stage manager with an established infrastructure that offers a well developed technical trading approach."
Maestro currently has $3 million under management in the Global Maestro Fund, a Cayman Island fund listed on the Irish Stock exchange.
The last few months have proved to be a challenging environment for CTA strategies, and the Maestro fund was down 5% year-to-date at the end of September. However, Delf points out that the fund has made a fantastic come back during the last six weeks.
"We've finally seen the market break out of its range bound trading in the last few weeks. As of today, our fund's year-to-date returns are close to break even."
Delf says that being an early stage global CTA fund based in Singapore has made raising assets a challenge. "We based ourselves in Singapore for economic, regulatory and lifestyle reasons, but it has not been ideal from a capital raising perspective." However, Delf expects that once the fund develops a longer track record, asset raising will pick up.
"Most of the US and European allocators who visit the region are here to meet Asian-focused hedge funds. However most of them also have global portfolios and would consider an Asian-based global fund manager for their other funds if he or she has an attractive strategy and track record."