January 2008 | Bloomberg
Adept Capital Launches Fund of Early-Stage Asian Hedge Funds

By Bei Hu

Jan. 16 (Bloomberg) -- Adept Capital Partners Advisers plans to raise $150 million from institutions over the next year for a new fund of early-stage Asia hedge funds, said Eleni Istavridis, chief executive officer of the Hong Kong-based asset manager.

The fund aims to generate annualized risk-adjusted returns of 15 percent to 20 percent by investing in as many as 20 hedge funds that focus on Asian investments, according to a company statement.

Adept Capital is targeting investments in hedge funds that have been in operation for less than three years and assets under management of less than $250 million, the statement said.

“Early stage managers have an intense drive to succeed,”said Tony Smith, the fund's manager. “They focus more on performance than growing assets and they tend to have fresh ideas.”

Adept Capital, set up in mid-2006, has picked 15 potential investment targets after screening more than 600 early-stage Asia funds. It will invest in hedge funds of all strategies, except special situations and distressed assets that buy illiquid assets, Istavridis said.

Smith and Tom Ashworth, now a director who is not a member of Adept Capital's staff, previously managed a similar fund at Kim Eng Securities Pte. Istavridis declined to give the size of the fund because it's owned by Kim Eng.

The Kim Eng fund, launched in May 2004, generated annualized return of 14.3 percent through the end of last year, beating the 11 percent gain of Eurekahedge's Asia fund of funds index, said Istavridis in a telephone interview today. It had a standard deviation, a measure of investment risk, of 7 percent, compared with the Eurekahedge index's 6.4 percent level.

Adept Capital will raise money from institutions in the U.K., continental Europe, the Middle East, Asia including Japan and Australia. It won't market the fund in the U.S. for the time being, Istavridis said.

The fund will charge a 1.5 percent management fee and 15 percent performance fee annually, she said.

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