Cavenagh Capital, set up last year by former Morgan Stanley and DBS Holdings Ltd. managers in Singapore, will start a new macro hedge fund in July after getting money from the €220 billion ($279.6 billion) Stichting Pensioenfonds ABP.
Andrew Gale and Lee Ka Shao moved to Amsterdam this month after getting a three-year seeding commitment from APG, which manages assets of the Heerlen, Netherlands-based fund, Mr. Gale said.
The Luxembourg-domiciled Cavenagh Asia Fund, which seeks to profit from broad economic trends, will start with about $40 million, said Mr. Gale, who worked with Morgan Stanley in fixed-income sales in London and Singapore for more than 15 years.
Asian hedge fund managers, especially startups and those overseeing smaller amounts, have been finding it tough to raise money as investors remain wary after the financial crisis. About 70% of the funds launched in the past two years had $50 million or less as of the end of March, according to Singapore-based GFIA Pte, which advises investors seeking to allocate money to hedge funds.
“The capital-raising environment is improving, money is still looking for good places to go, but you’d have to have critical mass to attract assets; it’s a chicken-and-egg situation,” Mr. Gale said in an interview. “Now we can build a meaningful track record based upon a meaningful amount of money.”
Cavenagh, which trades derivatives including currency and interest-rate options, plans to raise more assets from institutional investors such as pension funds and family offices in Europe, said Mr. Gale, who is CEO.
APG’s investment in Cavenagh was made through IMQubator, which provides seeding capital to new managers.
ABP had invested capital of €208 billion as of Dec. 31, according to the pension fund’s website.