GF International Investment Management Ltd. is setting its sights on the absolute-return segment to compete with its rivals in Hong Kong.
The firm is considering launching more private equity funds investing in stocks, fixed-income products and long/short instruments this year, the Hong Kong Economic Journal reported Monday, citing an interview with the firm’s new chief executive, Tom Ding Liang.
Unlike traditional asset managers, who use a relative-return strategy, which aims to outperform a certain benchmark using long-only positions, hedge fund managers use different strategies to produce a positive (absolute) return regardless of the direction and the fluctuations of the markets.
Absolute-return managers often use short selling, leverage and high turnover in their portfolios.
Meanwhile, the two southbound funds introduced to the city by the firm’s parent, GF Fund Management Co. Ltd., in December need some time to incubate in the market, Ding said.
He said more high-net-worth clients in the mainland are interested in investment products under the qualified domestic institutional investor scheme.
The firm is screening companies with outperforming management from high-growth sectors and the leading plays in certain underperforming segments for products based on an absolute-return strategy.
Ding estimates that the firm can find one suitable stock out of 10 in the market.
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