Avanda Investment Management Pte, founded by former GIC Pte senior executives, plans to start the first of three funds on July 1, according to a document obtained by Bloomberg.
The Avanda Global Multi-Asset Fund will trade bonds, equities and currencies, according to the document. It will get funding from GIC and Temasek Holdings Pte, said people familiar with the matter, who asked not to be identified as discussions are private.
“Avanda is probably the most anticipated launch to come out from an Asian sovereign wealth fund,” said Will Tan, a managing director at Singapore-based recruitment company Principle Partners Pte. “Their products are highly scalable and market expectations are for the fund to cross $5 billion very quickly.”
Avanda is among funds set up by former employees of GIC and partly seeded with money from the state fund. Lam Poh Min, former senior portfolio manager at GIC, co-founded Octagon Capital Management Pte in 2004, one of the first firms in Asia to use quantitative models. Aje Saigal, a former chief investment officer of global equities at GIC, left the sovereign wealth fund in 2012 to set up GIC-seeded Nuvest Capital Pte.
Avanda will start with more than 20 employees and expects to increase the number of staff to 30 by year-end, according to the document. The global fund will be followed by two others: an Asian equities pool and Asian fixed-income fund.
The global pool will target endowments, foundations and central banks as well as state and pension funds, particularly in Asia, according to the document.
Sung Cheng Chih, one of the founders of Avanda, declined to comment when contacted by telephone. Ng Kok Song, a former GIC group CIO and also a co-founder, didn’t respond to e-mailed requests for comment and couldn’t be reached via telephone.
GIC declined to comment in an e-mailed statement, as did Stephen Forshaw, a spokesman for Temasek, the state investment firm.
Avanda’s global fund doesn’t intend to use leverage significantly and doesn’t see itself as a typical hedge fund, according to the document. The fund management firm was founded by Ng, Sung and Quah Wee Ghee.
“This could be one of the biggest fund launches in Asia this year,” said Melvyn Teo, professor of finance at Singapore Management University. “The strategy they employ will be very similar to the one that they have used at GIC. They will focus more on capital preservation as opposed to betting on a specific strategy.”
Temasek last year started a venture with Dymon Asia Capital (Singapore) Pte, which backs new hedge-fund managers and strategies. Temasek committed $500 million initially while becoming a minority shareholder in Dymon.
Sung, who was GIC chief risk officer from 2007 until 2011, will act as chief executive officer of Avanda Investment, according to a filing with the U.S. Securities and Exchange Commission.