July 31, 2002

Martin Currie Expands Long/Short Reach in Asia

EDINBURGH, Scotland (HedgeWorld.com)--Martin Currie Investment Management, actively developing its long/short equity reach in Asia, has over the last few weeks launched a new Asia fund, closed its Japan fund to new investors and drawn up plans for a long/short Chinese hedge fund.

"We've been very active in Asia, but that's just part of our overall expansion in hedge funds, globally. We have three long/short strategies or sub funds that fall under the umbrella of the Martin Currie Absolute Return Fund. We're looking to grow that to five or six," said Allen MacCleod, a director with the firm's hedge fund group.

The latest addition to that line up is Asian Absolute Return sub fund, which launched this months with US$15 million under management. Like other sub funds in the series, the Asia fund is domiciled in Bermuda and has a Dublin listing.

The fund has a minimum investment of $US100,000, or its currency equivalent for euro and sterling-denominated series, which feature a currency hedge. The fee structure is 1.5% and 20%.

The latest fund invests in Asia ex-Japan, casting a wide net that includes long/short opportunities in places like New Zealand as well as in more established Asian markets like Korea, according to the firm.

The opening of the Asia fund comes as Martin Currie Investment Management closed its Japan fund to new investors. The two-year-old Japan fund has US$200 million under management. Existing investors will have a short window to make new allocations, until the hard close at the US$300 million level. "We expect that to hard close by the end of this year," Mr. MacCleod said.

The Japan fund has managed returns of around 24% since its inception two years ago, which perhaps isn't bad considering that the Nikkei has been languishing in multi-year recession.

Beyond Japan, Martin Currie Investment Management is looking to set up a hedge fund that will target Asia's other powerhouse, China. "We're looking to do a greater China long/short fund--investing in Hong Kong, Taiwan, and mainland China," Mr. MacCleod said.

The fact that you can't short mainland markets isn't going to stop Martin Currie. Mr. MacCleod said there are ways to synthetically simulate shorts that will hedge a portfolio. And the firm already has a strong reach into China thanks to its US$150 million long-only China Fund Inc., managed by Chris Ruffle who would also oversee its upcoming hedge fund sibling.

"We've seen big growth (in the hedge fund market) since we started our first hedge fund two years ago. Quite frankly, hedge funds have exceeded our expectations," Mr. MacCleod said.

Martin Currie hedge fund investors include institutions and high-net-worth individuals as well as family offices.

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