LONDON (HedgeWorld.com)–ABN AMRO Asset Management has launched its first single-manager hedge fund, with another single-manager fund to follow in early April.
The asset management unit, part of Amsterdam, The Netherlands-based ABN AMRO Bank NV, currently manages about US$600 million in funds of funds, but up until now it has not offered any of its own single-manager funds.
The new fund, called the ABN AMRO Emerging Markets Debt Hedge Fund LP, will be Cayman-domiciled and managed by Raphael Kassin, who currently manages the ABN AMRO Global Emerging Markets Bond Fund, according to a statement from ABN AMRO Asset Management.
Under Mr. Kassin’s management, the Emerging Markets Bond Fund has returned 23.5% annualized since July 1998.
With the new hedge fund, Mr. Kassin and his London-based team will conduct event-driven trading in the liquid, hard currency sovereign debt of emerging markets countries. The fund managers will take long positions in countries of which they have a positive opinion and short positions in countries in which they think economic, political or social events could play an adverse role.
“We are never neutral on any one country,” Mr. Kassin said in a statement. “We’re paid to make decisions and we therefore either like a country or we don’t.”
The fund’s managers will be paid 2% annually to manage the fund and take a 20% cut of any profits generated above a high watermark. The minimum investment is US$100,000. ABN AMRO officials said the fund’s expected capacity will be US$200 million, large enough to accommodate a number of investors but small enough to stay nimble in emerging markets debt investments.
Target returns are 15% annually with volatility in the 8% to 12% range.
The fund will launch with US$20 million in seed capital from ABN AMRO Asset Management, a move Gary Vaughan-Smith, head of alternative investments for the unit, said amounted to a big vote of confidence in Mr. Kassin and his team.
“The emerging markets debt team’s absolute return orientation and clear skill set in this asset class make them an obvious choice to manage our first single-manager hedge fund,” Mr. Vaughan-Smith said in a statement. “We are backing the team with our own money. …”
The fund is expected to be listed on the Irish Stock Exchange when it begins investing in late April.
Also in April, ABN AMRO Asset Management will launch a new currency hedge fund, the ABN AMRO Currency Fund, managed by Pierre Lequeux, said Herman Barten, head of business development for alternative investments at the bank. Published reports indicated the target return would be between 12% and 15%, with volatility of between 8% and 10%. Further information about that fund was not available by press time.