Martin Currie Investment Management, a Scottish-based fund manager, has agreed to acquire the Sofaer Capital European long/short equity business. Sofaer Capital currently manages approximately $280m (€230m) of assets, of which $140m is the Sofaer Capital European Hedge Fund.
The fund has delivered an annualised return of 8.0%, compared with the MSCI Europe benchmark’s -0.6%, and has protected client investments well during the downturn with an annualised Sharpe ratio of 0.67.
The firm said that the Sofaer team has delivered consistent long and short alpha throughout its history, with a best calendar-year return of +27.5% in 2006 and a worst calendar-year return of -4.5% in 2008.
Commenting on the sale, David Helm, chief executive of Sofaer Global Research (UK), said: “We have been giving consideration to the scaling down of our operations from the UK for some time and this transaction effectively delivers that. Furthermore, the sale of the Sofaer European Hedge Fund to Martin Currie also delivers continuity for our investors which we feel is very important.”
He said Sofaer will be maintaining a research capability in London, although withdrawing from European fund management.
Essentially, the group is reverting to its roots in Hong Kong where Michael Sofaer started managing hedge funds in 1983. The remaining Asian and global funds will all be managed from Sofaer’s Hong Kong location.
Willie Watt, chief executive of Martin Currie, said the acquisition enabled Martin Currie to further strengthen its expertise in European equities and “fill an obvious gap in our long/short equity business and add substantial assets under management to our hedge-fund business”.
Michael Browne and Steve Frost, the two principals that manage the Sofaer fund, are expected to join Martin Currie on 1 July. Charlotte Dagg, the investment analyst working on the fund, is expected to join later in the year.
It is expected that the Sofaer Capital European Hedge Fund will be managed by Martin Currie with effect from 1 July. Browne and Frost have worked together on European equities for over 20 years and have co-managed the Sofaer Capital European Hedge Fund since 1 January 2001.
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