Seven months is a long time to be unable to approach potential clients – so it’s perhaps not surprising that Richard Surrency has taken on a new role at alternatives manager Algebris Investments.
His previous employer, UK-based Legal & General Investment Management, set up a Hong Kong office in mid-2012, its first in Asia. Surrency joined to run regional sales and distribution, while Alan Flynn – previously Asia ex-Japan head of investment consulting at Mercer – is regional head for compliance and regulatory purposes, and John Bridges is head of operations and client service at L&G IM. The firm declined to comment.
It is understood that L&G IM has not yet secured a licence from Hong Kong’s Securities and Futures Commission. The firm had been seeking a type 9 (asset management) licence but had been unsuccessful, say sources, likely because it does not have fund management capabilities in Hong Kong. Seeking a type 1 licence is a common approach, since it allows for product sales and distribution.
Declining to comment on his previous firm, Surrency has returned to Singapore to take up the post of managing director for capital strategy at UK-based Algebris. He started there on February 1, having left L&G at the end of January. Before joining L&G IM, he ran Morgan Stanley’s regional transition management business out of the Lion City.
Surrency will look after marketing, distribution and capital-raising for Asia at Algebris, as the first person to undertake such a role for the firm outside Europe and the US. His coverage area is Asia-Pacific, including Japan, Australia/New Zealand and the Middle East.
There has been a chief investment officer, Ivan Vlatchkov, based in the region for about two years, who is supported by analysts in London. The rest of the team is in London.
“We’ll be looking mainly at raising capital from the region,” Surrency tells AsianInvestor. “Most of it has come in the past from Europe and the US.”
Algebris’s focus will be on institutions chiefly, but also some private-wealth clients in the form of large family offices. The firm’s traditional approach has been to run segregated accounts for large institutions, although it launched a Ucits platform for its strategies about six months ago.
This offers daily or weekly liquidity and a minimum investment of $1 million. It is therefore likely to appeal to private clients, especially those in Asia who tend to have a shorter-term investment horizon than those in Europe.
Algebris is affiliated with the Children’s Investment Fund (TCI) in the UK and outsources much of its operations to TCI Fund Services’ 33-strong back- and middle-office capabilities.
The firm will consider adding personnel in Asia, such as analysts and execution specialists, when it secures mandates from institutional clients in the region, says Surrency. “We want to be sure of the business model in Asia before we expand. However, it is our intention to add when appropriate.”
Algebris has $1.1 billion in AUM and invests across the capital structures of financial companies. This includes buying subordinated credit – contingent capital and hybrid securities – of banks and insurers in Europe and North America, and investing in equities of financial firms, with a value bias.
Its core fund is the Global Financials CoCo Fund, which invests in contingent convertibles, an instrument introduced after the global financial crisis to recapitalise troubled financial institutions.
CoCos are different from regular convertible bonds in that the likelihood of the paper converting to equity is ‘contingent’ on a specified event. The CoCos fund returned +58.8% in 2012 and the long-only equity fund gained +34%.