Hedge fund managers Triskele Capital have launched a new fund this summer named the Triskele Convertible Bond Fund.
As the name suggests, it follows in the footsteps of the convertible bond theme, upon which several managers have alighted this year. Unlike a number of those funds, the Triskele CB fund is not long-only, though that element forms about half of the overall strategy.
The remainder of the portfolio is comprised of 40% convertible bond arbitrage and 10% directional plays. Fund CIO Shiba Tsuyoshi says that the convertible bond market is now far more tricky than it was six months ago, because discounts have narrowed sharply as bankruptcy worries have receded. He therefore finds the best opportunities today on the arbitrage side of his convertible portfolio.
The fund now has assets under management of $30 million and is up 5.2% since inception. Target returns are 10%-15% on volatility of less than 12%. Fees for the new fund are 2% management fee and 20% performance fee. The fund is being prime brokered by Merrill Lynch.
The CB fund is a stable-mate of the Triskele China Fund which has been around since mid-2007. In 2008 the fund returned 28%, and that was a good enough performance to win it AsianInvestor's Greater China fund award for 2009. To accomplish that, the fund had been operating at virtually market neutral levels of exposure. That approach has now changed and net exposure is between 60%-70%. In the last three months the China fund has pulled in $110 million of new money and now stands at $220 million in size.