November 18, 2015 / 11:12 AM / 5 years ago

INTERVIEW-Asia veteran Lloyd George's Bamboo fund up 10 pct in October

* Down 5 pct since April launch, but above benchmark

* Eyes break-even assets of $250-$300 in end of Q1

* Plans second strategy focused on India sub-continent

By Simon Jessop

LONDON, Nov 18 (Reuters) - Asia investment veteran Robert Lloyd George said his fledgling Bamboo fund returned 10 percent in October after a “difficult” year and its assets should reach break-even in early 2016.

That still left the pan-Asian hedge fund down 5 percent since its April launch, but 10 percent above its benchmark, the MSCI Emerging Markets index, Lloyd George said.

Markets across Asia have been roiled this year by growing concerns around China’s growth outlook and the impact of rising interest rates in the United States, with China’s CSI300 index still 30 percent off its June high.

The fund has assets of around $50 million currently. Lloyd George told Reuters on Tuesday that he expected the fund, which he runs out of Hong Kong, to grow to $250-$300 million by the end of the first quarter, buoyed initially by high-net-worth and family office cash, before being capped at around $1 billion.

Marianne Scordel, founder of Bougeville Consulting, which is helping introduce Lloyd George to potential clients in Europe, said some investors were now thinking about re-entering the market after the heavy market falls earlier in the year.

“A lot of investors wouldn’t come out of an existing manager to invest in a new Asian manager, but some are considering it now (given) they’ve already come out.”

A fixture in Asian markets for more than 30 years, Lloyd George ran as much as $17 billion in his first company, Lloyd George Management, before selling out to Bank of Montreal in 2014 and then setting up his current firm, Lloyd George Advisory.

Lloyd George, the great grandson of former British Prime Minister David Lloyd George, said he was avoiding capital-heavy industries including property, energy and mining, and was focused instead on around 30 solid “core bets” in the consumer, Internet, technology and basic service industries, among others.

The fund, which does not use leverage or bet on falling share prices but does charge a performance fee, had 30 percent invested in Hong Kong firms, 20 percent in mainland China, 15 percent in India and 15 percent in Japan, as well as smaller investments in Singapore, Thailand and Taiwan, he said.

With more than 400 company visits so far this year, Lloyd George said his favoured investments included China Lodging , a Nasdaq-listed play on China’s domestic tourism industry, and wealth management firm Noah, which already has $10 billion in assets and is growing fast.

Lloyd George said he was looking to set up a second, Indian Ocean strategy, which would focus on Indian mid-caps, as well as those in Pakistan, Sri Lanka, Bangladesh and surrounding countries.

“With the oil price coming down... the biggest beneficiary in the world is the sub-continent,” he said, citing its young consumer population and 20-year lag to China in terms of developing infrastructure and an export sector. (Editing by Susan Fenton)

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