PointWorth Management Private Ltd. is launching a pan-Asia long/short equity hedge fund. The company, with approximately USD120 million in assets, is considering using over-the-counter equity derivatives, said Dennis See, ceo in Singapore. The fund will focus primarily on equities, but the investment managers will have "broad discretion" in their use of financial instruments, including derivatives.
Over-the-counter derivatives will most likely be used in the Korean and Taiwan markets, where See believes there are problems shorting stocks. The firm plans to take directional positions, not focusing on minimizing risk, therefore not hedging all trades. Franklin Tan, the chief investment officer of the new fund, commented that the fund's flexible structure will allow it to either hedge or leverage its bets. PointWorth's prime broker, Morgan Stanley Dean Witter, has supplied ideas for employing derivatives, which it will consider after the fund gets rolling, he added.
So far, PointWorth has already raised USD6 million for the new fund, and aims to reach USD20 million in the next three months, See said. Hedging decisions will be left to the investment managers who will decide the proportion to hedge, "from 0 to 100%." The new fund, coined the Boulevard Asia Fund, is slated to start on March 17, targeting private investors in Asia.
After seven years of running long-only funds, PointWorth's new vehicle will allow the firm to take short positions, See said. He believes that some indices in Asia may be headed lower over the next five years, declining to give reasons. PointWorth plans to launch two additional hedge funds by the end of the year. One will focus purely on Japan, while the other will invest in technology stocks throughout Asia.
