There’s a new Hong Kong hedge fund ready to bare its teeth: Dragonback Capital launched its maiden fund, the DragonBack Asia-Pacific Equity Multi-Strategy Fund, this month with US$7 million in proprietary capital. The firm is headed by CEO Robert Lance, former co-head of Lehman Brothers’ equities division based in Hong Kong.
The DragonBack Fund sports three core strategies: equity long/short, relative value and volatility arbitrage. “Since we’ve all come from volatility and derivatives backgrounds, we use an optionality where it is possible to express our views in the equity long/short space,” said Lance.“Our volatility trading strategy will be for the most part long vega, but can be long or short depending on market conditions. It will however manage the downside risk for the overall strategy in the case of major market shifts. Given the flow and opportunistic nature of the fund we see opportunities throughout the region and we think Japan is going to be a breakout performer this year.”
Matt Barnett, former director of trading at Credit Suisse, is the fund’s chief investment officer while Phil Tye, former CFO for PMA Capital Management and director of the Asia prime brokerage department for CS, serves as its chief operating officer. The head trader, Ken Niizeki, is a 17-year veteran of Morgan Stanley, built that firm’s internal prop and derivative trading platforms in Japan.
The new Cayman Islands-domiciled offering charges a 2% management fee and a 20% performance fee, with a US$1 million minimum investment requirement. The fund offers monthly redemptions with 90 days notice and a 2% redemption fee is payable back to the fund within the first year.