Janchor Partners, the Asia-focused hedge fund set up by John Ho, the former Asian head of The Children’s Investment Fund, has achieved another year of positive performance at a time when many of his rivals are losing money.
Mr Ho is up 8.6 per cent for 2011, a year in which the average Asian long short manager was down 10 per cent, according to preliminary calculations from Eurekahedge. That follows even more stellar performance in 2010, when his fund was up 35.5 per cent.
Mr Ho had many of the same investment theses as his peers, but in playing them he managed to pick winners on both the long and short sides. One of the big themes of the past few years has been consumption in China. But playing that thesis has proved perilous.
One of Mr Ho’s favourite trades, for example, was a long position in the shares of Swiss luxury brand owner Compagnie Financière Richemont, which produces goods such as Cartier jewellery and Baume & Mercier watches in a deflationary Europe to sell to the increasingly wealthy consumers of China. (Indeed the majority of both sales and profits come from Asia or Asian consumers travelling abroad.)
That position was balanced with a negative bet on a retailer with the reverse dynamic – it produces in inflationary China and sells in deflationary Europe. Both sides of that trade proved lucrative.
“John has a strong track record, he knows how to play liquid Asian equities across sectors while sizing his positions right,†says Soofian Zuberi, head of global markets sales for Bank of America Merrill Lynch in Hong Kong. Mr Zuberi notes for example that several fund managers were caught out by sharp falls in Asian equities in 2011 and reduced liquidity made it harder for many of them to exit their positions.
Mr Ho follows more of a long-term investment strategy with much of his money having a three-year lock-up. Unusually, his management fees drop as his fund grows, a feature he adopted to reassure investors he will focus more on returns than the amount under management.
A native of Hong Kong, Mr Ho spent two years at Citadel Investment and five years running the Asian operations of The Children’s Investment Fund before launching his hedge fund in 2010, one of many from local talent in the last several years.
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