Pacific Sun Investment Management, a newly established Hong Kong-based Greater China investment management and advisory specialist, has begun pre-marketing its China Mantou Fund to institutional and high-net worth investors, with the aim of raising $100 million in its first year, says Andy Mantel, founder and managing director.
The firm has assembled an impressive board of directors to help it access information in what can be an opaque market. Big guns include Stuart Leckie, former chairman of Fidelity Investments (Asia-Pacific) and now chairman at Woodrow Milliman China; Marc Faber, a.k.a. Dr. Doom; David Hui, CEO at Tian An Investments and Sun Hung Kai; and David Lee, chairman and CEO at ABN Amro Asset Management for China and Taiwan. In addition, the fund has four advisors: George Chen, chairman of Taiwan’s Capital Group; Peter Fu, deputy group managing director at BNP Paribas Peregrine; Philip Gray, former executive chairman at HSBC James Capel and former CEO at GT Management; and TL Tsim, a China political risk and strategic planning advisor.
Mantel highlights the important role of the Taiwan connection. The Mantou Fund (in English, the Steamed Bun Fund) will invest in China plays globally, including 20 Taiwan-listed companies. “There’s a lot of undisclosed investment from Taiwan in China,” Mantel says. Having players such as ABN Amro Asset Management – which last year acquired Taiwan’s Kwang Hwa Asset Management – and Capital Group will give Pacific Sun an advantageous view. “Associating with wheelers and dealers should help us know what’s going on,” Mantel says.
The fund will have a six-month lock-up period and will list in Dublin. It requires a $100,000 minimum investment and carries a 1.5% management fee and a 15% performance fee. Mantel expects it to provide a 15-25% annual return over five to 10 years. It will not follow any index. The first tranche closes at the end of January. The fund is launching now to take advantage of a cheap market. Mantel notes six to 12 months ago the markets were overvalued.
Mantel says the fund won’t overweight any particular asset class. Rather, it will go for the top performing stocks in a range of categories, including high-growth mid-caps, corporate restructuring stories in the deregulated services industry, large-cap new economy plays and Taiwan Straits plays. Mantel declined to name the placing agents, as they haven’t formally come on board.
The fund is co-managed by Mantel and Tony Zhang, director of IT at Pacific Sun. Mantel previously ran one of Taiwan’s first QFII accounts for Capital Securities and helped establish China’s first joint venture asset management company, Shanghai International Asset Management. Zhang comes from Newport Pacific Management in San Francisco, where he served as senior investment officer for Greater China. William Bodine, chairman at the Investment Advisory Group in New York and former research director at Citicorp’s investment management group, is senior advisor to Pacific Sun.