The Asset Manager Is to Focus on Central and Eastern Europe and Russia
Byline: Anuj Gangahar
Convergence Capital, a new asset management firm focused on Central and Eastern Europe and Russia (CEER), is set to launch its first hedge fund in the next two weeks. The convergence strategic absolute return (Constar) fund will be run in partnership with Williams de Broe, one of the City of London's oldest stockbrokers.Although there are up to 90 funds specialising in Central and Eastern Europe, few long/short equity funds specialise in investment opportunities in the region. Among the most successful has been Thames River Capital's fund run by Rory Landman and Martin Taylor, former star Barings traders. This fund, however, is a more general player than the Constar fund.
Constar's hedge fund will invest predominantly in the 10 EU accession states, whose applications for membership were approved by the ratification of the Nice Treaty by Ireland on October 19.
Through trading on the CEER markets, Constar will aim to achieve absolute returns while maintaining a strong risk-management discipline. The fund will target both retail and institutional investors and will cap at $100m (E100m).
James Oates, who will co-manage the fund with Nicholas Vardy, says: "Capping at $100m is sensible for a fund investing in equities in this region. Getting too big can be more hassle than it is worth. We are focused on managing our risks and the volatility of the fund using a very technical approach.
"The Central and Eastern European markets may be coming back to life. You just have to look at mergers and acquisition activity. It may be pretty dead in most areas, but it is certainly not in Central and Eastern Europe. …