Kelusa Eyes US$200M For China Fund

Oct 6 2011 | 12:50pm ET

Kelusa Capital Group hopes to raise almost US$200 million for its China-focused hedge fund as its manager eyes a growing list of opportunities.

The two-year-old Kelusa Capital China fund currently manages about US$55 million, most of it in cash as fund manager Kenton Leo waits out the market volatility. But the fund hopes to grow to US$250 million as it plans to jump back into the markets within the next 18 to 24 months.

"Panic creates opportunities," Leo told Bloomberg News. "The list of stocks that I have today that are at all-time low valuations is growing daily as we speak because things are sold down indiscriminately." Among those are container shipping firms, ports and exporters.

"These companies are being hurt by a slowdown in China exports, but borderline bankruptcy is being put into these valuations," Leo said. "These will be an impact, but this entire sector is not going to go bankrupt."

Kelusa China is up over 7% this year despite a 1.7% setback last month.

Leo is targeting investors seeking low-volatility returns in all market environments. "We're very focused on thinking about picking companies that will underperform and outperform in the market, and constructing a portfolio where company fundamentals drive the fund performance, rather than big macro events."

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