Jun Bei Liu and Jason Todd have announced the launch of their new hedge fund business Ten Cap.
According to a statement from the firm on Wednesday, Ten Cap, which will be operational from 1 February, signals the largest ever launch of an Australian long-short equity-only hedge fund, at just over $1.5 billion.
Moreover, Liu will serve as co-founder and lead portfolio manager, while Todd will step into the role of co-founder and chief executive.
In October, Liu, who was a Tribeca portfolio manager at the time, unveiled plans to step out on her own, telling InvestorDaily the move comes amid a “fantastic opportunity” in the current investment landscape for active managers who can step up and deliver.
At the same time, she announced that she was migrating the $1.5 billion Tribeca Alpha Plus Fund, which would continue to be managed under her guidance with the same strategy – now, it will become Ten Cap’s flagship fund.
Liu began her career at the firm as an analyst in 2005, covering sectors such as healthcare, retail and media before becoming co-portfolio manager of the Tribeca Alpha Plus Fund in 2016, and taking full control of the fund in 2019.
This week, she revealed that she has already hired an experienced investment team to join her latest venture.
“Ten Cap will bring a fresh approach to Australian funds management – where money managers are accessible and where trust is built up by putting clients first and growing together,” Liu said.
“The objectives of the fund have not changed. We aim for equity-like returns but with less market volatility given the fund’s ability to hold both long and short positions.
“The fund will continue to operate under its established investment mandate and fee structure, ensuring continuity and continued excellence in performance.”
Also commenting on the launch, Todd clarified that the fund provides exposure to the ASX 200 Index through a style-agnostic strategy, overlaid with a proprietary long-short allocation and hedging strategy.
“Under Jun Bei’s stewardship, the Alpha Plus Fund has been one of [the] very best performing in [the] market over both a short and long-term period,” Todd said.
“While the investment process and how the fund is run by Jun Bei will remain unchanged, she will now have a dedicated investment team and trader. The historic performance of the fund, back to 2006, remains the same.
“We believe that a fund management company does not have to be large or have multiple funds to be successful.
“Our goal is to continue to provide our clients with best of breed returns and a best in class investment experience.”
Notably, the origins of the name “Ten Cap”, the firm clarified, come from the letter “J” being the 10th letter of the alphabet and the first letter of its founders’ names.
“It also represents our strive for perfection of being 10 out of 10,” Todd said.
Liu unfazed by changing landscape
Recent Morningstar research revealed that Australian asset managers are facing challenges, including net outflows, increasing exchange-traded fund popularity and fee pressures that are contributing to a decline in their ranks.
A number of funds have closed shop in recent months, including small caps manager NovaPort Capital in May, ethical fund manager Ethical Partners in July and specialist income manager Wheelhouse Investment Partners in September.
Others have been forced to merge, particularly those of a smaller scale.
However, Liu remains unfazed, telling InvestorDaily last year there is space for active managers who are able to deliver on their investment promises.
“We’ve always believed, if you’re a good performer, if you’re a good active manager, there will always be good support. We have found in the last five and a half years we’ve been getting inflows from both institutional and retail, and wholesale support. If anything, we found we receive a lot of inbound flows from any number of clients, even internationally,” she told InvestorDaily last year.
“So I truly believe, if we can deliver the performance as we’ve promised, consistently, the market may change but we will continue to take active market share.”
With Australian and global markets increasingly embracing passive strategies, Liu sees this as a “fantastic opportunity” for the remaining active managers to step up and capture market share.
“Personally, my job is to deliver the performance that I’ve promised clients and that’s my end of the bargain.”
