The Insynergy absolute China fund is a regulated version of GAM’s Greater China equity hedge fund, run by Michael Lai. It will take a long and synthetic shorting approach to equities, using derivatives to create short positions within the Ucits III rules.
Insynergy chose GAM to manage the fund because of its vast hedge fund experience. It says Lai, who is Chinese but educated in the West, understands the Chinese markets, the way the government works and the differences within the 33 Chinese provinces.
The company says that with countries in the West heavily indebted after propping up their banking systems, rapid growth in China is a big opportunity for investors to recover recent losses chalked up during the credit crunch and grow their capital.
However, the region can be highly volatile which makes it unsuitable for long only funds in Insynergy’s view, as they are unable to profit from falling stocks by going short.
Ezra Sun’s long/short Veritas China fund could provide competition for Insynergy, but it has a higher minimum investment of £7,000. Advisers may also consider the Fidelity China special situations fund on the back of veteran manager Anthony Bolton’s track record.