Met Readies Asia-Pacific Momentum Fund

Mar 22 2012 | 2:41am ET

Met Capital Management is set to apply its quantitative strategy to a whole new part of the world.

The firm will launch its Met Pacific Fund this quarter. Like the existing Met Europa Fund, the Asia-Pacific vehicle will use a systematic post-earnings momentum trading strategy covering developed markets in the region, including Australia, Hong Kong, Japan, Singapore and South Korea.

"We are not aware of any other hedge funds taking a similar approach to the developed Asian markets," Jonathan Gordon, Met founder, said in a statement. "We have completed an extensive eight-year back-testing, and more recently front-testing, which have produced very attractive risk-adjusted returns at 14.8% annualized return, 2.8 Sharpe ratio, 4.8 annualized volatility and a correlation of 0.1 to the MSCI Asia Pacific Index."

London-based Met hopes to garner between US$30 million and US$50 million for the fund at launch. Met Pacific will have a capacity of US$1 billion, twice that of the Europa fund, which currently manages US$40 million.

A number of Asian hedge funds closed their doors in 2011, but Gordon told FINalternatives this not only does not discourage Met from launching a fund focused on the region, it might prove an advantage:

"Significant numbers of Asian hedge funds did close their doors in 2011 due to poor returns," said Gordon in an e-mail. "[T]he Asian indexes lost more than any of the global, European, North American and Latin American indexes. In contrast, the seven-year back-testing for our Pacific strategy has produced highly favorable, risk-adjusted returns throughout a variety of market cycles. Indeed, the high levels of closure amongst what would have been our competitors means the capital that still wants and needs to flow into Asian markets and hedge funds should be easier to come by."

Gordon says the firm has "always wanted to expand into other geographic areas" and given "the similarly fragmented nature of the Asian-Pacific developed markets to those in Europe, it was natural that we chose to start testing our post-earnings momentum strategy here."

As for the timing of the launch, Gordon says they gave the Met Europa fund time to "consolidate and prove its robustness in a variety of market climates" and now, with five years' experience with the post-earnings momentum strategy in European markets and with all the necessary infrastructure in place, the firm is ready to launch its Asian fund.

The new fund will have a $250,000 minimum investment requirement. It will charge 2% for management and 20% for performance. The Cayman Islands-domiciled fund will feature Morgan Stanley as prime broker and custodian and BNY Mellon as administrator.


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.