New York—The parent of GaveKal Research, a prominent Asia-based provider of macro research, has partnered with UK hedge fund manager Marshall Wace to create a new asset management venture, Marshall Wace GaveKal Asia. For GaveKal, the new venture expands their asset management capabilities by partnering with one of the largest hedge fund management groups. For Marshall Wace, the venture represents a diversification into more actively managed strategies.
Putting Money Where Your Mouth Is
GaveKal was already in the asset management game, having launched its first fund in 2003. First and foremost, this move will help GaveKal scale the asset management portion of its business more quickly, as well as give it professional support in moving away from its previous long only orientation.
The new venture, which launches today, will begin with $300 million in assets under management from GaveKal’s existing funds:
- The GaveKal Asian Absolute Return Fund is a US$ denominated, Caymans domiciled, long-only, absolute return oriented fund investing in Asian bonds, equities and currencies. This fund was launched in July 2003.
- The GaveKal Asian Absolute Return UCITS Fund is a Euro denominated, Irish domiciled fund. This fund follows the same strategy as the GaveKal Asian Absolute Return Fund and the main difference is the currency exposure (Euros against US$). This fund was launched in January 2006.
- The GaveKal Platform Company UCITS Fund is a US$ denominated, Irish domiciled, long-only equity fund which aims to outperform the World MSCI by investing in companies evolving away from the vertically integrated business model to the “platform company” business model. This fund was launched in September 2006.
- The GaveKal New World Fund is a US$ denominated, Irish domiciled, long-only equity UCITS fund which invests in companies in Asia, the Middle East and the former Soviet Union. This fund was launched in October 2007.
GaveKal is also advisor to the following funds, which are outside the new joint venture:
- The European Divergence Fund. GaveKal Capital is a co-advisor to this hedge fund whose purpose is to profit from the unfolding European credit crunch.
- The Trophy Property Fund. GaveKal Capital is an economic advisor to this Chinese real estate private equity fund managed by Winnington Capital.
- The Asia Prosperity Fund. GaveKal Capital is an advisor to the Asia Prosperity Fund. The Asia Prosperity Fund is an Asian Long-Short equity hedge fund managed by Mattias Lamotte (a former GaveKal partner) and Richard Wu.
The firms said the joint venture will develop a number of new Asian dedicated long/short hedge funds, starting with a Japan-focused vehicle scheduled to be launched in the third quarter.
Diversification from TOPs
For Marshall Wace, the venture provides diversification from its $14 billion TOPS (trade optimised portfolio system) platform, which analyses broker research to produce trade ideas. Returns from TOPs have started to flag as new competition from other managers such as Two Sigma has become established.
Chief executive and co-founder Ian Wace, said in a statement the agreement was part of a larger expansion plan. “This joint-venture also marks the first step in a major build-out of our ‘manager-led’ strategies,” the statement said. “My co-founding partner, Paul Marshall, has recently taken global executive responsibility within Marshall Wace to build our manager-led activities to a level compatible with our unique process-led applications.”
The venture will exclude Marshall Wace’s existing $1 billion in Asian funds managed using its TOPS (trade optimised portfolio system) platform, which analyses broker research to produce trade ideas. It will also exclude GaveKal’s research business.
GaveKal Chief Executive Louis-Vincent Gave will be CEO of the joint venture, and GaveKal chief investment officer Alfred Ho will take on the same role for the long-only business within the venture.