The Alcora Global Consistent Interest Fund (AGFCI) aims to fill the trade finance gap that emerged as banks pulled back from lending after the global financial crisis and were subject to tighter regulations, according to a statement from the firm.
The fund promises to take advantage of the unmet demand for trade finance, which the Asian Development Bank last year estimated to be $692bn in Asia-Pacific, the firm said.
Sébastien Bruyant, a managing director at Alcora, told FSA that the fund will target short-term commercial paper from materials companies, an area that he believes offers satisfactory returns and liquidity.
The duration of three months gives investors the capability to redeem quickly, he added.
The asset class also has a low correlation to other asset classes. According to Bruyant, investors usually think of hedge funds when it comes to low-correlation investments. However, he is cautious with them as they have not performed well since 2008.
The AGFCI fund, which was incepted for in-house investment only in March last year, met its performance objective of Libor 4%-5% with less than 2% of volatility on a one-year basis, according to Bruyant.
He declined to comment on the fund’s AUM, but said that the target is $100m by March 2018. The figure includes seed money from the family as well as external investors.
This is the first time that Alcora is opening a fund to external investors, Bruyant said.
The firm received approval from the Monetary Authority of Singapore last year to operate as a fund management company, he said, noting that the product will only be offered to accredited investors, which include family offices, high net worth individuals and private banks.
Singapore-headquartered Sebrina Holdings specialises in venture capital, real estate, oil and gas assets and trade finance, Bruyant said. It also has a Switzerland office.
FOs and fund management
A family office establishing an asset management arm is not at all surprising, Bruyant said. He is seeing more family offices establishing an asset management operation, especially in Asia and in Europe.
For example, Singapore-based JL Family Office, which specialises in real estate and private equity, has a real estate asset management firm called ARA Asset Management, which invests real estate investment trusts (REITs) and private real estate funds, according to its website.
Nair, a family office also based in Singapore, established Matterhorn Advisory Singapore in 1999, which was a boutique fund management firm that specialised in investments in India, according to its website. However, the family office decided to exit the fund management business in 2011 to focus on becoming a proprietary investment house.
“There has been increased discussions between different family offices to share ideas, investment opportunities and the best way of doing business, such as managing funds and setting different objectives,” Bruyant said.
Asia-Pacific family office portfolios saw average returns of around 3.9% for the first nine-months in 2016, which followed a flat 2015 when family office’s portfolios value remain unchanged, according to UBS and Campden Wealth’s 2016 global family office report.
Largely due to exposure to developing market equities, the 2015 performance lagged family office performance in North America and Europe. In 2016, the same asset class rallied, which made 2016 a better year for APAC family offices, the report said.
