Former International Monetary Fund chief Dominique Strauss-Kahn plans to raise $2bn in a macro hedge fund, his firm, LSK & Partners, said today, as investors continue to back a low-risk and rapidly growing investment strategy.
The venture marks Strauss-Kahn’s first partnership with an asset manager for the DSK Global Investment Fund that will invest globally, Mohamad Zeidan, the firm’s chief operating officer told Reuters.
Strauss-Kahn will manage the fund with his daughter and economist, Vanessa Strauss-Kahn, and is currently on a trip to China to raise capital for the hedge fund from institutional investors and wealthy individuals.
“China plays and will play a predominant role in this fund,” Zeidan told Reuters in an interview in Shanghai, where he is promoting the fund. He said the fund is awaiting regulatory approval from Luxemburg before it can start raising the money.
“We have met with the largest groups in each sector and I’m talking to the financial sector, insurance companies, bankers, financial groups, private and public,” he added.
China, home to some 643,000 millionaires in 2012, according to a Capgemini and RBC Wealth report, and large institutional investors, is seen as a major source of capital for alternative investments such as hedge funds and private equity funds.
Institutions such as China Investment Corp, the country’s sovereign wealth fund, as well as China’s currency regulator and National Social Security Fund, have been actively seeking opportunities to diversify into alternative investments.
Strauss-Kahn, who is the special economic adviser to the Serbian government, joined forces in 2013 with Thierry Leyne, a civil engineer and a member of the french society of financial analysts, to create LSK & Partners.
LSK & Partners’ Luxembourg-based hedge fund will rely on Strauss-Kahn’s analysis of economic, financial and political events and other policy trends that affect market prices.
Macro hedge funds focus on major economic trends and events and bet anywhere they see value, including stocks, bonds, currencies, commodities and derivatives markets.
Such funds managed $166bn at the end of February in the $2 trillion global hedge funds industry and raised $16.3bn last year, data from Eurekahedge shows.