ASIA NEWS: Discretion in a box

Pius Ho’s start-up venture, Moonbridge Capital, has included a half-time strategy vote in the investment period of its debut fund. The measure provoked discussion in the industry. PERE Magazine, June 2012 issue.

After returning from a reconnaissance tour of the investor universe at the beginning of the year, Hong Kong-based start-up Moonbridge Capital is ready to begin marketing its debut real estate opportunity fund. The firm, led by ex-Abu Dhabi Investment Authority senior portfolio manager Pius Ho, is in the process of launching the Moonbridge Capital Greater China Development Fund, for which the firm is targeting $400 million.

The eight-year fund shares much in common with other blind-pool, commingled funds. However, in one distinguishable feature, Moonbridge is expected to insert a clause into the fund documentation that offers investors the opportunity to shift its investment thesis half-way through the fund’s investment period. According to Ho, the measure was introduced after the firm canvassed views from its prospective investors.

Describing the measure as “discretion in a box,” Ho said: “Basically, at the mid-point of our investment period, we will have a review of the strategy.” As he explained, the larger investors in the fund would be able to vote to alter the strategy either at the two-year point or after half of the equity has been deployed. 

“Those are the right times to question whether we are on the right path,” Ho said. He added, however, that the firm did not anticipate major strategic shifts arising from the vote, such as a switch in asset class focus. “We just think this is fund governance that LPs would appreciate,” he said.