Swiss-Asia Cap Intro Interview Series – PruLev Global Macro Fund
March 17, 2016
Written by Swiss-Asia
PruLev Global Macro Fund is one of the featured alternative investment funds at the Cap Intro by Swiss-Asia event. Despite a gloomy global economic outlook, Fund Managers Norman Tang and August Li shared in a recent Bloomberg interview that it may be good news for stock pickers. We caught up with them in the office to find out more.
- So tell us, what is the investment strategy at PruLev Global Macro Fund?
The fund invests in well-developed and liquid global markets, primarily in OECD and selected Asian Tiger countries. We seek to capitalize on super-cycles, long-term trends, economic and geopolitical events. In short, many interesting things under the sun!
We also invest in equities, fixed income and commodities asset classes, and we make extensive use of derivatives in order to achieve our investment objectives. Risk management is the cornerstone of our strategy – we believe in very thorough risk management, on top of searching for the best returns based on strong fundamentals.
- What made you decide to start your own fund?
We started the fund about four years ago, initially to house and manage our families and close friends’ investments. Since then, the growth has been tremendous, with AUM going up from USD 7.2M in Feb 2012 to USD 58M in Feb 2016. At the Cap Intro by Swiss-Asia event, we are opening up to accredited investors around the world to benefit from our unique approach.
- How do you keep the momentum going in a volatile and unpredictable market?
Again, risk management is paramount in a high-volatility situation, and that guides our actions. We are scanning the markets for tactical opportunities that will reduce our risk exposure, at the same time increasing our return potential.
Last year, we did that with SMI (Swiss Market Index), which generated more than half of our returns in 2015. This year, we expect to see opportunities like that springing up as well, especially in these turbulent times.
- What is your trading philosophy?
We use derivatives to trade multiple-asset classes, we can also go long and short at the same time, maximizing our earnings potential while keeping risk within limits. Being a global macro fund, we have positions that can benefit from major market trends and short-term market movements.
If we are convinced by the fundamentals, we are able and willing to take a position for a few years – even though it may be stagnant or non-performing in the interim – to be vindicated by a strong rally after that.
For example in 2012, we kept our largest equity allocation in Japanese equities, which has not been performing for many years, because we believed that the Japanese government and Bank of Japan (BoJ) should have done much more to boost the weak economy. True enough, with Abenomics from late 2012 to early 2015, the Japanese stock markets went up by more than double. We figured that the BoJ should have implemented negative interest rates since two decades ago.
- Any advice for aspiring entrepreneurs looking to start their own fund?
It is an exciting time to enter the markets. While technological advances have levelled the playing field, start-ups must be mindful about the supporting activities that are essential to the good running of the fund. These include compliance, back-office and administration. You need reliable partners to help with these crucial functions as well.
- If you were not a fund manager, what would you be?
We would be running our own family office.
For more event information on the featured funds, travel arrangements and Swiss-Asia Financial Services, please visit http://www.swissasia-group.com/cap-intro/. Registration closes on 4 April 2016.