Min Chen joined Somerset Capital Management in Singapore to head up a team that will add standalone China offerings to the London-based global emerging markets equity specialist's product line-up, said Dominic Johnson, CEO and founding partner.
With China approaching 50% of the global emerging markets universe, positioning Somerset to meet growing investor demand for China-specific strategies has been a priority, Mr. Johnson said in an interview Monday.
Mr. Chen joined from Singapore-based hedge fund Dymon Asia Capital, where he was portfolio manager of the $23.5 million, long-only Prospect View China Fund. Under an agreement between Somerset and Dymon Asia Capital, Mr. Chen and Lilian Tai, who worked with him as an analyst, will join Somerset's China team as portfolio manager and senior analyst respectively, allowing long-only Somerset and alternatives-focused Dymon to "focus on what we do best," Mr. Johnson said.
Somerset will also take over the management of the Cayman Islands-domiciled China fund. In line with regulatory requirements, the firm will be appointed sub-investment manager of the fund on Nov. 1, and become investment manager a year later.
Mr. Chen and Ms. Tai will be joined by David Heng, senior China analyst at Somerset, who will take on the role of assistant portfolio manager on the fund, and Jovan Yeow, who joined Somerset as a senior analyst from Capital Group in February.
Somerset's investment professionals already had strong China capabilities as part of their global emerging markets remit, with roughly 40% of its $6.8 billion in assets under management invested in Chinese stocks. However, asking those GEM managers to run standalone China strategies as well would have been a distraction, Mr. Johnson said.
Bringing on a China veteran like Mr. Chen, who shares Somerset's "bottom-up, concentrated, long-term" approach to building portfolios, will leave the firm well positioned to meet growing demand from an institutional investor universe that remains "pretty underweight" China at present, Mr. Johnson said.
Mr. Chen's experience with a broader range of Chinese companies than the tech behemoths that represent the bulk of exposure for many investors is likewise a plus, together with his familiarity with ESG-related issues – an increasingly important element of Somerset's investment approach, he said.