Tacoma, Washington-based Frank Russell Company is looking to add Asia-based hedge fund managers to its nearly $70 billion global multi-manager funds, says Derek Doupe, director of alternative investments.
Doupe, who is based in London, is in Hong Kong to meet potential partners, concluding his trip next week in Singapore. He is responsible for the alternative investment portion of the Russell multi-manager funds. Alternative investments are a new sub-category for Russell, although the firm has had a multi-manager fund since the 1980s.
Inclusion in the Russell universe would be a coup for regional hedge fund managers, who often strive against obscurity compared to their peers in the United States. Although the firm sources client money from Asia, including Japan and Australia, as of now it has no hedge funds based in the region involved in its funds. Doupe declines to name the funds he is talking with, but notes they are from Hong Kong, Singapore, Japan and Australia.
"There are a growing number of hedge fund managers that operate in Asia," he says. "Although there are some structural issues that can impede hedge funds operating in Asia, we're seeing a market develop here."
Doupe notes that the hedge fund side of the multi-manager fund more resembles a fund of hedge funds, because the variety of strategies makes it difficult to follow a broader 'best of breed' approach found in multi-manager products.
He expects local hedge funds will be incorporated into the Russell multi-manager offerings by the second or third quarter this year. The strategies of the funds he is looking at tend to be very equity focused although he is also seeing the emergence of funds with a convertible arbitrage strategy.
"We are looking for managers who have a demonstrable and sustainable proposition," he reveals. "We want people who want to build a long term asset management business not a short term pool of capital through which they can make enough money to retire."