Friday, 31 October 2014
Last updated 3 hours ago
May 30 2012 | 1:29pm ET
Fortress Investment Group has launched an Asia-focused volatility hedge fund helmed by a pair of former Artradis Fund Management hands.
The Fortress Convex Asia Fund debuted on May 1 with US$55 million in initial assets. The new fund invests in stock, interest rate and currency options, as well as Asian volatility instruments, Fortress said in a document obtained by Dow Jones Newswires. It will seek "to deliver non-correlated returns in normal markets and out-sized returns in stressed or dislocated markets, providing 'Tail Risk' protection," Fortress said.
"Specifically, a general state of negative real interest rates across the region is fueling asset prices and inflation in Asia. These same low interest rates are highly destructive to the largest pool of savings in the world today, and are prompting Asian savers to take additional risks in order to generate satisfactory rates of return," it added. "We believe this imbalance of risk and return may present interesting opportunities on a sustained basis for a volatility-based investment strategy."
Convex Asia is managed by David Dredge and Andrew Wong. The two formerly worked at Artradis Fund Management, once Singapore's largest hedge fund, which closed last year. Dredge and Wong remain based in the city-state.
The fund charges 1.5% for management and 20% for performance. Like other funds at publicly-listed Fortress, it will publicly report its monthly returns beginning next month.
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