* Forms partnership with hedge fund North of South
* To help fund firm grow revenues
* Comes as sentiment towards EM improves
By Simon Jessop
LONDON, May 18 John Beckwith, whose Pacific
Investments Group has launched a number of asset management
firms since he co-founded it in 1994, has taken a stake in
emerging markets focused hedge fund North of South Capital.
The tie-up marks Beckwith's return to emerging markets after
a roughly 7-year absence, and a period of several years where
demand to invest in emerging markets has been in the doldrums.
The deal with London-based North of South, set up in 2004 by
Matt Linsey and which runs around $100 million across two funds,
is part of a plan by Pacific to expand its Pacific Asset
Management arm into wholesale and institutional markets.
North of South says it takes its name from a book by Shiva
Naipaul detailing the author's journey through newly independent
East Africa, in which he "encounters the idealism and the folly
driving the countries to various policy extremes".
Financial details of the deal and the full scope of the
partnership were not disclosed, but rising operational costs and
pressure on fees have made it tougher for smaller hedge funds to
launch and survive, and some have sought to share the burden by
joining a larger rival or a platform with multiple fund firms.
Pacific's previous investments include Liontrust, Thames
River Capital and River & Mercantile, which collectively now
manage more than $20 billion in assets.
While emerging markets fell out of favour due to global
growth concerns and falls in commodities prices, market gains in
2016 and 2017 have encouraged some investors to hunt for cheap
assets, with both Ashmore and Aberdeen Asset Management
reporting an improved sentiment.
"As investors, we are optimistic about the prospects for
emerging markets equities," Beckwith said in a statement.
Linsey, an investor in emerging markets for more than 25
years, uses analysis of equities, credit and commodities to pick
out undervalued stocks which have scope to outperform.
Matthew Lamb, chief executive of Pacific Asset Management,
said in the statement that despite growing demand to invest in
markets using index-tracking funds, active managers in less
efficient markets, such as Linsey, continue to outperform.
As well as its main offshore hedge fund, North of South also
advises investments in the GAM Star North of South fund, which
has outperformed global emerging markets, net of fees, by more
than 4 percent a year over the last 5 years, it said.
(Editing by Alexander Smith)