Asia's Hedge Fund Old-Timer Allen Backs Fledgling Singapore FirmBy
Boyer Allan co-founder Nicholas Allan to invest in GNY Asia
GNY Asia fund to focus on long-short equity strategy
Nicholas Allan, co-founder of one of Asia’s earliest hedge funds, is backing a fledgling Singapore-based firm even as investors are fleeing the industry amid subpar returns.
Allan, who helped start Boyer Allan Investment Management in 1998, is coming in as an investor and adviser to the new GNY Asia Fund, Portfolio Manager Amit Sharma said in an interview. The GNY fund, which will bet on and against Asian stocks, will get the majority of its seed money from strategic investors in the Middle East, Sharma said, without identifying them.
GNY has garnered backers as many hedge funds are struggling with volatile markets and the biggest industry shakeout since the financial crisis. It has been especially difficult for new and smaller hedge funds as investors have tended to gravitate toward the largest and best-performing managers.
“It’s difficult to get money from Asian investors at the moment and we are not even targeting them,” said Sharma, who will lead the fund with Vivek Doval. “Our conservative risk-return approach is mainly geared toward Western investors.”
Boyer Allan was co-founded by Allan and Jonathan Boyer. Operating out of the U.K. and Hong Kong, the company oversaw $1.9 billion of assets at its peak. While returning 15 percent on average, its flagship Boyer Allan Pacific Fund lost 19 percent in the first 11 months of 2011, and the firm told investors in December that year it would liquidate most of its funds and shut the business.
“We are a continuation of the Boyer Allan investment style - a very detailed fundamental driven approach focusing on Asia,” Sharma said.
Doval had been an assistant fund manager at Boyer Allan until 2012, when he became lead manager of a $1.7 billion Asia fund for British Airways Pension Investment Management Ltd., according to a presentation by the firm. Sharma worked as a director at Macquarie Group Ltd. and previously in credit research for Deutsche Bank AG.
GNY’s fund, which will start trading in December, will hold concentrated positions in about 30 stocks on average and will target annual returns of 15 percent per year, according to the presentation. Asia-focused hedge funds using long-short strategies have returned 0.4 percent this year through the end of October, on track for their lowest annual return in five years, according to data provider Eurekahedge Pte.
The new fund will be managed from Singapore and also have an office in London, Sharma said. He didn’t disclose assets under management.
Hedge funds investing in Asia excluding Japan suffered net outflows of $2.1 billion in October, 1.3 percent of their assets and the highest withdrawals in more than four years, according to Eurekahedge.