Magnum Pops Cork On China, India Funds of Funds

Jan 4 2008 | 10:26am ET

Magnum Global Investments is making investing in China and India a priority in 2008. The $350 million fund of hedge funds shop last month launched the Magnum China Fund, a Greater China-focused fund of hedge funds, and kicked off the New Year with the unveiling of the Magnum India fund.

Magnum’s China Fund invests in hedge funds and long-only funds focused on the Greater China region. It currently invests in six managers, with plans to add another 10 to 12. 
 
According to fund documents, the Curaçao, Netherlands Antilles-based firm is bullish on the Chinese economy, which continues to grow at a “remarkable growth” rate of over 10% a year. Despite the fast pace of growth, the country’s inflation remains “well under control” at around 1.4%. And the government is expected to continue focusing on rebalancing the economy, in an effort to make growth less reliant on investment and net exports, while introducing various measures to help encourage consumption. In addition, the region’s stock markets “are poised to enjoy tremendous gains over the next few years,” although the firm expects to see continued volatility.

The minimum investment for the fund is $100,000. It charges a 1.5% management fee and a 10% incentive fee over a hurdle of 20%.

Magnum’s Indian vehicle has been set up as a feeder fund to invest in a fund of hedge funds managed by New York-based RAS Capital Management which launched in November 2006. That fund currently includes a dozen managers employing a mix of long/short equity, event-driven and arbitrage strategies

As with the China Fund, Magnum is banking on India’s growth prospects. The region’s average gross domestic product growth in last three years has been 8.5%, and improved infrastructure could increase its GDP by 9.5% to 10% over the next decade, according to the firm. The country’s rapidly growing derivatives market allows for hedging and risk management an its futures market volume is 2-3x the cash market.

The India fund charges a 1.5% management fee and 10% incentive fee.

Magnum was founded in 1994 by Dion Friedland.


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