The fund will invest in liquid Asian public equities that have attractive valuations or high growth prospects. The goal is to generate high risk-adjusted returns utilising a fundamentals driven strategy that is complemented with state-of-the-art quantitative modelling, risk analytics and macro overlays. The fund portfolio has been structured to minimise the downside risks that are inherent in the emerging Asian economies.
The Gateway Fund is one of the few emerging Asia focused funds out of the Middle East and KCIC aims to raise $250 to $300 million over the next one to two years.
By becoming the first firm in the Middle East to implement the "Operational Alpha" platform offered by Bloomberg and Omnium, KCIC's operational capabilities allow for real time portfolio monitoring and reporting. KCIC is also one of the few firms out of the Middle East that has a fully functional prime brokerage relationship with UBS and ability to trade hedge baskets with other marquee brokerage firms.
KCIC Principal for Investments, Dan Xystus said, "We have spent the last three years laying the foundation for this launch and are very excited about the prospects of this fund based on growing demand for Asia focused investment opportunities that are liquid and appropriately hedged against severe market downturns."
Over the last ten years trade and investment between the Middle East and Asia quadrupled, reflecting strong investor interest in Asia and there is a great expectation that Asia's growth story will not only continue but will in fact dominate the current century.
KCIC Managing Director Ahmad Al Hamad said, "Emerging Asia will continue to lead emerging markets across the globe. We believe emerging Asia will soon play predominant role in global growth as the world moves from being a financially leveraged world to a demographically leveraged one.
"We in the Middle East stand to benefit from this paradigm shift that analysts are dubbing 'the new silk road'".
Led by China and India, emerging Asia has shown tremendous growth possibilities in the last decades. China's economy has grown fifteen-fold just over past three decades, at an average rate of 10 per cent year. Over the last 20 years, India has grown at an average annual rate of 6.4 per cent. In the last five years, China became the world's third largest economy, and India the 12th. By 2050, China's economy expected the world's largest, and India the third.
Based in Kuwait, KCIC invests in domestic demand driven sectors in Asia, namely energy, real estate, infrastructure, and financial services.