FrontPoint Partners was launched in autumn 2000, and currently has more than $1 billion in assets under management. The founders are Gil Caffray, former head trader at hedge fund Tiger Management; Philip Duff, formerly chief operating officer at Tiger and a chief financial officer at Morgan Stanley; and Paul Ghaffari, former portfolio manager at Soros Fund Management.

The hedge fund has a maximum gross exposure of 150% and target volatility will be in the mid teens. Target returns will be 25% net per annum. It will start operations with assets under management of $50-70 million and aims to build to $300 million after 12 months. The company hopes to be 50-60% net invested on day one.

The fund will focus on Taiwan, Hong Kong and mainland China. The approximate split of the portfolio will be 40% each in China and Taiwan, with 10-12 long positions per country, with the remaining 20% in Hong Kong. There will be a maximum of around 60 positions. Companies listed elsewhere that are construed as China plays by virtue of their operations may also be included – but their total will be capped cumulatively at 20% of the fund.

FrontPoint is a platform based in Greenwich, Connecticut. In Hong Kong the fund managers are executive director James Soutar alongside Kenrick Leung. The FrontPoint Asia-Pacific Fund is also run out of Hong Kong. This $400 million fund was up 17.5% in 2005. In addition the platform also offers the $1.1 billion FrontPoint Japan Fund, which was up 35% in 2005.

In an interview with FinanceAsia, Kenrick Leung, the portfolio manager said, “Recent volatility presents us with good investing opportunities,…..DRAM and Chinese property stocks both look interesting at present.” Soutar and Leung will be assisted by China Specialist Simon Qian and their Asian trader Andrew Jans. They plan to hire one more China analyst with experience in the A-share market. All members of FrontPoint have aligned their long-term interests through shared ownership of FrontPoint’s equity.