The fund was launched on May 6 and is available for sale in Hong Kong and Singapore. It targets the institutional and wholesale markets.
The firm believes the strategy offers better risk adjusted returns and returns on an absolute-only basis than long-only funds. The Cayman version of the fund was launched in May 2015. According to RWC data, to 31 March this year it recorded a 10.3% return while the benchmark index, the MSCI Asia Pacific, returned –13.9%.
The investment strategy involves a 20% return target, at which point a stock will typically be sold, said Garret Mallal, the portfolio manager, who joined the firm last year when RWC hired 15 fund managers from US-based hedge fund Everest Capital.
The long/short strategy is supported by eight analysts based mainly in Singapore, Mallal said. The research team is focused on 30-35 long positions and a similar number of shorts. “Asia is a big market and we are not looking at the whole universe of stocks.”
Currently he is positive on India and has added long positions to the portfolio.
“In Korea and Japan, however, we are long on stable growth stocks, such as internet or cosmetics companies. On the short side, it’s cyclical stocks in Korea and exporters in Japan.
“That fits in with our overall view of Japan, which is negative. The [Abenomics] experiment in Japan is pretty much done and that presents [market] downside. The Japanese will try and press more levers on the policy side, but that’s limited.”
The fund is neutral on China on a net basis. However, the biggest macro risk to the portfolio is China’s excess debt and continuing growth of the credit market, Mallal said.
RWC Partners is a boutique fund manager 49% owned by Schroders. It has $11.7bn in assets under management.
