Ex-Temasek MD Readies Developing Asia Hedge Fund

Aug 8 2014 | 4:37am ET

A former managing director at Singapore’s sovereign wealth fund is set to launch a US$100 million hedge fund focused on smaller companies in Asia’s developing markets.

Mathew Welch has joined Asia Capital & Advisors, where he plans to offer a small- and mid-cap long/short fund investing. ACA Asia Dorset Fund has already won US$45 million in commitments and hopes to reach its initial target within a year.

Welch said Dorset will target annualized returns of 8% to 12%. He told Bloomberg News that he planned to build a two- to three-year track record before approaching institutional investors, relying in the meantime on friends, high-net worth investors and family offices.

“Investors are becoming more cautious about China and we are seeing more investments flowing into Southeast Asia,” Welch said, adding that he favors Indonesia, the Philippines and Thailand.

“Economic growth in many Asian countries will outpace the rest of the world over the coming years as the population is young, investment from abroad will increase and the way companies are run is rapidly improving,” he told Bloomberg. “Many small- and medium-sized companies will benefit from those developments disproportionately as they are often still undervalued and under-researched.”

In addition to the small- and mid-cap stocks that Dorset will focus on, it can also have up to 30% of its assets invested in bonds and large-cap stocks.

Welch spent two years at Singapore’s Temasek Holdings, and since leaving has worked at ING and Daiwa Securities Group.

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