Hong Kong-based asset management firm Enhanced Investment Products has unveiled its latest hedge fund, an Asian high yield convertible bonds vehicle.
The new offering, which launched this week with $17 million in seed capital, is long biased and does not pursue an arbitrage strategy, but rather utilizes delta hedging and trading the optionality embedded within each bond position, according to the firm.
Yvon Choi, senior portfolio manger at EIP, is responsible for managing and trading the EIP High Yield Convertible Bond Fund. Choi reports to Tobias Bland, CEO of EIP.
“With regards to risks, the fund will hedge interest rate risk exposure to protect against rises in rates during the life of the fund. The fund will hold a diversified basket of holdings, no more than 20% in any one industry sector or country and no issuer will represent more than 8% of the fund NAV,” said Choi. “The seed investment will kick start the fund and we aim to provide investors with a solid annual return of around 10%-20% with low volatility compared to pure equities.”
Until September 2007, Choi was head of trading for Asia for Elliott Advisors, a $10 billion hedge fund. Prior to that, he managed the Pan Asian CB and volatility portfolio at Nomura’s internal hedge fund.
“Yvon is new to the team however he has hit the ground running and has been very instrumental in the development of our new CB fund,” said Bland. “Launching a new fund in this current economic climate is testament to our strong performance in 2008 and the excellent investment team we have been building up over the past year. In addition, our distribution capability has been significantly strengthened by our business partnership with Triple A Partners.”
The bond fund is the second fund in the firm’s portfolio that offers absolute returns. The other fund, the EIP Overlay fund, concentrates on non-directional arbitrage trading. In total, EIP has $250 million in assets under management.
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