Sun steers Veritas to rich pickings in China as market shifts to consumer growth

Wed Nov 24, 2010

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How Veritas used its simplified but effective strategy of low leverage and high liquidity to maximise alpha from the China markets


By late 2009, fund manager Ezra Sun had a pretty good idea about how to approach the new Veritas China Fund, having navigated the Real Return Asia Fund through five eventful years. China plays a significant role in the $850 million Asia including Japan fund, and Sun reasoned that its straightforward long/short, low-leverage, high-liquidity strategy would adapt well to a Greater China fund. So far, so good - the latest hedge fund addition to the Veritas Asset Management stable recently passed its first anniversary, clocking up returns just shy of 17% in the first 12 months.

The Veritas China Fund was launched in October 2009 as a UCITS III fund, giving investors daily liquidity and reassurances about the limited extent of leverage used in the fund. "Over the past six years, the Real Return Asia Fund has not had excessive leverage. If you pick the right stocks you don't need...

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