Cazenove Launches Macro Hedge Fund

by Carla Johnson, Investors Offshore.com

25 April 2006

Cazenove Capital Management will next month launch a new equity long/short global macro hedge fund which will invest in both emerging and developed markets.

The Cazenove Absolute Return Fund, which will have a capacity limit on investment of $1.5 billion, will have three roughly equal capital pools: a long bias fund invested in emerging markets; a long bias fund in developed countries; and a short bias fund also in developed countries.

Emerging market funds have performed well of late. According to Hedge Fund Research Inc., the average emerging market fund was up 9.43 percent at the end of the first quarter. Funds centring on Eastern Europe and the CIS were the best performers in this category, returning 15.23 percent.

The new Cazanove fund aims to cap exposure to any single emerging market to a maximum of 20 percent. Also, investments will be limited to 8 percent in any single long position and 4 percent in any short position.

The fund is set to commence trading on May 31 and it will typically hold some 60 to 100 positions. It will be managed by investment specialist Tim Love, who has a twenty year track record managing funds and overseeing investment strategies at HSBC Asset Management, Mercury Asset Management, ING Barings and most recently, Deutsche Bank.

“The fund has generated considerable interest in London, Europe and the Middle East, with investors finding Tim’s process and approach very different to other global fund managers," Cazenove Capital told Reuters.

“The concept is to look at global winners and losers combined with emerging markets to provide the sustainability of annualized returns rather than the volatility we have seen from emerging market exposure,” the company explained.

With $850 million under management, Cazenove Capital Management has three main components to its business: a Specialist Investment Management arm domiciled in Dublin and the UK; a private client businesses servicing wealthy individuals; and a specialist investment services to meet the specific needs of charities.

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