Clemente Cappello, a former analyst of a fund affiliated with Permal, last month launched the Sturgeon Fund, a Cayman Islands-based vehicle which primarily invests in fixed-income and equities of the Central Asian countries of Azerbaijan and Kazakhstan.
The fund employs a top-down investment style investing in local fixed income and equities. It holds equities while hedging oil prices because the local economies are so dependent on the latter, according to Cappello, who is optimistic about the region’s economy.
“We’re very bullish on the fact that there are a lot of market changes going on in Kazakhstan and Azerbaijan, and we really think that the liquidity is going to increase,” said Cappello.
The vehicle is also looking for private equity-type opportunities in regional listed companies with very little liquidity, where it would deploy equity without leverage into deals. It will also invest in regional real estate as part of its p.e. mandate.
The fund, which is currently managing some $10 million, charges fees of 1% for management and 15% for performance for a two-year lockup, and 1.5% and 20% for one-year lockup. The minimum investment requirement is $100,000.