14/12/2011 Author: Will Wainewright

Monsoon Capital rolls out offshore version of Ucits

Monsoon Capital, the Asia-focused investment firm worth around $330m, is launching a Cayman-domiciled version of its systematic strategy next month in what is believed to be the first case of a hedge fund setting up an offshore model of an existing Ucits product.

Founder Gautam Prakash told HFMWeek that the firm is launching the fund because “there is a sort of investor that doesn’t want Ucits, like Asian and tax-exempt US investors”.

Monsoon launched the fund in Delaware in August, followed by the Ucits version in September. Assets at the strategy, which employs a trend-following systematic approach in Asian equity markets, currently stand at $35m and should grow significantly when the Cayman fund launches.

“We launched the Ucits fund first because many investors prefer or require Ucits, such as European institutions. But we have realised that we need an offshore version for full access to the Asian market,” said Prakash.

“To be able to run a Ucits fund demonstrates institutional-level infrastructure, so creating an offshore fund was easier having been through that process.”

Industry sources operating in the Ucits sector told HFMWeek that while running Ucits and offshore versions of the same product was common, this was the first known case of a fund manager launching in this order.

Fund managers have conventionally started offshore and then ‘come onshore’ to start Ucits funds, which pose a far higher burden in terms of operational infrastructure.