SYW Launches Offshore Long/Short Hedge Fund

Jun 12 2008 | 2:00am ET

New York-based SYW Capital Management, a long/short hedge fund, has launched an offshore vehicle that will trade pari passu with its 21-month old SYW LP.

The firm is looking to garner commitments of $50 million for the new offering before beginning trading on June 16.

SYW LP was launched in September 2006 and returned 170% in 2007. The $30 million fund is up 72% as of the first week of June, according to Andrew Lee, chief operating officer.

The fund invests in some 90 companies in 15 sectors and 32 industries, ranging from energy to basic materials to financials.

“You’re going to be hard-pressed to find another fund that has the diversification we do and generating comparable returns,” said Lee. “Because our average size of the companies we invest in are fairly small and the fact that we focus on mid-to-large cap stocks, there’s ample room to scale up to $500 million without impacting our performance.”

The fund is bullish on coal and basic material stocks and bearish on retail and financial names.

“Given the rapid rise in oil, it’s taking a lot of investors time to adjust to pricing, so that’s going to negatively impact the retailers and financials,” Lee said, adding that the fund is looking to gain exposure to the health maintenance organization and insurance sectors because of pending regulations that will improve the fundamentals in those sectors.

SYW’s offshore fund will charge a 2% management fee and a 20% incentive fee with a $200,000 minimum investment requirement.

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