The Luxembourg-domiciled fund, Sturgeon’s first foray into the retail market, is designed to tap into Central Asian growth, which has been boosted by demand from China and India for its natural resources.
Sturgeon, which runs a $30m multi-strategy Central Asia hedge fund, says the Ucits portfolio will have 25 to 35 holdings. The fund will be “long-biased” but will also be able to take short positions in commodities and indices, by using exchange traded funds and derivatives.
Towards the end of December, the largest weighting in a mock-up portfolio was to Kazakhstan, the ninth-largest country in the world by land mass and the biggest exporter of uranium. Other exposures included Turkmenistan, Tajikistan, Georgia, Mongolia, Turkey and Russia.
According to Sturgeon, named after the caviar-bearing fish found in Central Asia, the fund will take advantage of “under-developed, under-researched and fundamentally inexpensive” markets in the region. It will be lead-managed by Clemente Cappello, the company’s founder.
The fund, which is expected to be unveiled early in the second quarter of 2012, will have an annual management fee of 2%, and a 20% performance fee. To protect performance, Sturgeon plans to close the portfolio to new money, if and when its assets reach approximately $300m.
