Platinum Capital Management has created a hedge fund that will
take a long and short investment approach to Chinese companies
and companies based elsewhere that will profit from growth in
The Platinum dynasty fund has a target return of between 15 per cent
and 20 per cent a year. It was introduced because Platinum is keen
to offer investors exposure to China but wanted to do so using local
knowledge rather than trying to run a portfolio from London. This is
why Shanghai-based Dynasty Asset Management was appointed as
the fund's adviser.
The fund will benefit from the experience and local knowledge of
Dynasty Asset Management, which was founded in 2000. It currently
has an eleven-strong team which includes analysts, investment
managers and administrators. Chief investment officer Steve Dai and
Edward Mullen, who specialises in risk management and client
service, are joint managers of the company and both have around 10
years' investment experience.
Investors in the Platinum fund gain access to Dynasty's investment
portfolio which Platinum says has returned in excess of 50 per cent a
year since it was introduced in 2000. However, these returns are
partly due to exceptional returns in the first half of 2000 when the
markets were buoyant.
China has crept back in favour with fund managers as a result of its
improved growth rate, which is due to various factors. Recovery is
due not only to an upswing in the US, but also strong domestic
demand for higher standards of living and demand from other
countries for Chinese goods. China is also benefiting from the
outsourcing trend because its labour costs are low.
However, rising interest rates could have a negative impact on growth
in the region and this is where sophisticated investors may benefit
from this fund's ability to sell short.