RWC Partners – formerly MPC Investors – has hired another manager for its Asia Ascent fund, which is expected to be launched next month. Chris Shale will join former colleagues Carmel Peters and Kirsty McLaren in managing the fund, which will be able to short stocks and indices in the Asian market.
All three worked together at Sofaer Capital and previously, in the 1990s, at Rothschild Asset Management in Hong Kong. As reported in Fund Strategy (June 30, page 8), Peters and McLaren were recruited by RWC in preparation for the Asia Ascent fund launch. They were previously managers of the Sofaer Asia Hedge fund.
Their hedge fund knowledge will help the new RWC fund in taking short exposure to both the Asian market and individual Asian stocks.
Although the RWC Asia Ascent fund will draw upon the managers’ hedge fund expertise, it has the explicit target of index outperformance, says RWC.
Unlike 130/30 strategies, the RWC Asia Ascent fund does not have to retain 100% exposure to the market, nor does it have to run a short portfolio. Instead it can use shorting or not, depending on the managers’ views.
“They can short the indices and they can reduce their market exposure if they don’t think equity markets are going to go up,” says Dan Mannix, head of sales at RWC. “We are just using the flexibility allowed under Ucits III.”
Mannix adds: “We feel Ucits III and hedge funds are becoming increasingly similar. [But] it’s unusual to find managers with experience of shorting stocks within the Asian market, especially within the Ucits III environment.”
However, Mannix says the portfolio is more likely to be “very long” rather than short when it launches on October 20, in light of the recent sharp fall in Asian equity markets.
Mannix says last week’s ban on shorting British financials is unlikely to affect the fund. “We don’t foresee a big permanent change to shorting,” he says.
“This is a very particular extreme stress in the market at the moment. The regulator has taken the decision to step in and make some temporary policy to stabilise financial markets.”