Geomatrix’s
Akamai Pan-Asia strategy is down 80 basis points this month though Dec. 19 after finishing about even in November following a significant loss in October. Since inception in July, the fund has returned -10.11% to Dec. 19; in October, a difficult month for many hedge funds, the strategy lost 10.43%. The large-cap, long/short fund hedges its market risk via listed index futures and focuses on Japan, Hong Kong, China, Korea, India and Australia. Chairman
Robert Howe said the fund is being run with a slight Japan bias due to better values there and less leverage.
Fundraising for the strategy, which has targeted early-stage investors and hedge fund seeders, has been difficult, said Howe. The fund has about $5.2 million, half of which is partner money. It is holding high cash levels but steadily rebuilding its stock exposure on both the long and short sides. The fund’s net exposure is 10% net long, using that to make “cheeky bids” when and where it can, said Howe. It is raising net shorts and longs again but remains defensive in sector bias and stock selection. Hong Kong/China is the only market considered positive in its directional models.
Howe is bearish through the first half of 2009 due to extreme volatility, though he believes that a short-term counter-trend global equity bounce started on Nov. 21. While that bounce has run into fundamental bad news and technical selling pressure, however, it has created short opportunities.
As for the October loss, Howe said roughly 6% of that drop was due to currency losses on accumulated profits from short positions. The fund didn’t hedge profit back into U.S. dollars via a currency forward.