Emea fund targets 20%pa returns with 15% annualised volatility
Former head of Barings' emerging Europe, Middle East and Africa (Emea) desk Klaus Bockstaller, is launching an Asia Pacific hedge fund for the Flemings family office this month.
It comes as his previous employer this month launches its third hedge fund product, in this case investing in Eastern Europe, the Middle East and Africa (Emea). Managed by Marina Akopian, the long/short Baring Emea Absolute Return fund, has capacity set at $250m.
Bockstaller, who previously ran the Baring Emerging Europe Trust and Baring Eastern European fund, already runs a European Frontier fund for Fleming Family & Partners Capital Management (FCM).
Since its launched on 1 December 2004, it has returned 12.9% net of fees with volatility of 3.75%. This compares with annualised target volatility of 8% and target returns of 15%-20%.
The Asia Pacific fund will target the same returns and volatility as European Frontier, but will have $100m more headroom with a cap at $250m.
Barings anticipates annual returns on its Emea hedge fund in excess of 20% with volatility of around 15%, in part a function of the underlying markets it is investing in. Akopian said the portfolio will have a natural long bias as the investment universe has strong growth prospects. But it will use a selection of shorts as and when distinct opportunities arise, she added.
The group already runs Japanese and Chinese absolute return funds and has some $2bn under management in a range of East European equity products, including its flagship $1.4bn Baring Eastern Europe fund.
Julian Rogers-Coltman, chief executive at FCM, said the single hedge fund division was aiming to extend emerging markets hedge funds beyond "hedge fund fees for long-only product" and use short books to generate returns and dampen volatility.
He added that over time, it made sense to explore emerging markets such as Latin America with new funds, but also to attract institutional money with absolute return products.
"The hedge fund community will struggle with relative value strategies going forward," he said, "too much money is chasing too few opportunities. You will see a great demand for directional strategies, which in turn have limitations."
Baring Emea hedge fund targets 20%pa returns with 15% annualised volatility.
FCM European Frontier targets 15-20%pa returns with 8% annualised volatility.
FCM Asia Pacific hedge fund has same return and volatility targets as European Frontier.
SLA's share price has almost halved since merger
Three shifts in sector
Takeover rumours continue
Raised £116m in total
Protecting and dividing family wealth