HSBC Halbis Partners, the alternative investment arm of HSBC, will launch an equity long/short technology fund on 1 September biased toward Asian companies' interplay with US counterparts. This is the sixth fund launched by Halbis.
"Existing tech funds may call themselves global but they are US-centric," says Charles Robinson, London-based director at the firm. The Halbis product is biased toward European and Asian companies instead, and will partly draw from HSBC's China and India-based research capabilities.
But the heart of the team are two tech veterans, Connor O'Mara, a former fund manager at Dresdner RCM (a unit of Allianz Global Investors) and Nick Dillon, an ex-Lehman Brothers analyst, who had left their jobs in 2000 to create a pure research boutique called Arete Research. The duo then considered investing in their own ideas and setting up a boutique hedge fund with backing from fund of funds manager Thames River Capital, but they still needed help with infrastructure and risk management. These are resources HSBC could provide, and Thames River made the introduction - and remains a strategic investor in the fund, which will debut with $50 million under management.
Goldman Sachs is prime broker and HSBC Securities Services the administrator, using its platform acquired from Bank of Bermuda.
O'Mara specializes in top-down views on countries and sectors. Dillon, a former engineer, is "the nuts and bolts guy", as Robinson puts it: the bottom-up stock picker. Their paper track record at Arete was sufficiently impressive to interest Thames River and Halbis. Unlike the first generation of tech hedge funds from the 1990s, which played directional bets, O'Mara and Dillon cut their teeth in the post-Nasdaq bubble years and generate much of their alpha from shorts. They see few global investors trawling the Asian tech story, relative to the interest in the American industry. But Asia is hollowing out Europe's hardware players and also offers purely local stories.
The fund's capacity is $500 million. It is domiciled in Dublin and charges a standard 1.5% management fee and 20% performance fee. It offers monthly liquidity and there is no lock-up period.
