GLOBAL - IMQubator, the innovation project backed by asset manager APG, has made a €25m seeding commitment in a new macroeconomic Asia hedge fund.
The hedge fund - Luxembourg-based Cavenagh Capital - seeks trades with an "asymmetric pay-off" using derivatives, including currency and interest rate options, and focuses on the changing probability of a given outcome, rather than the outcome itself.
Rikard Lundgren, CIO at IMQubator, said: "The Asian space, with its diverse markets and interactivity, offers many opportunities, while Lee Ka Shao, the CIO of Cavenagh Capital, has shown a very strong track record as a trader at JP Morgan and DBS.
"His management style is characterised by original thinking and a very strong orientation toward creating strong and cheap opportunities."
Lundgren said the return target for the Asia fund would be 15%, but added that it could return as much as 30%, as Ka Shao was a "high-octane trader".
Ka Shao and Andrew Gale, Cavenagh Capital's chief executive, have moved to Amsterdam, as IMQubator requires its managers to be in the same office for monitoring and transparency.
Ka Shao has been running positions at hedge fund manager Abax Global Capital in Hong Kong and managed a multi-billion-euro portfolio on an absolute-returns basis, with a macroeconomic and situational approach across multiple asset classes.
Gale spent four years with Dexion Capital in London, where he was responsible for product development and asset raising for closed-end funds of hedge funds.
Before that, he worked 15 years for Morgan Stanley, where he was head of fixed income sales for South East Asia, focusing on fixed income, interest rates, derivatives and credit products.
IMQubator has been commissioned by APG, asset manager of the €219bn Dutch civil scheme ABP, to provide €250m of seeding capital to new managers.
Its mission is to realise absolute returns at low costs by investing in new and innovative investments managers.
To date, IMQubator has made five €25m commitments.
Jeroen Tielman, the company's chief executive, said he expected to make three more by the end of the year.