Singapore exchange-listed New Silkroutes Group Limited (NSG) has launched a joint-venture with New York-based CG Capital Partners to offer fund management services, including sophisticated financial products and dedicated asset-class-specific funds, to Asian investors.

The new asset management firm will invest in a portfolio of US-dollar, euro- and RMB-denominated structured products, which include equity-linked derivatives and equity-linked indices, as well as raise and manage funds that can buy additional assets and enter into transactions to finance projects.

Sean K. Rice (pictured), managing partner of CG Capital, who will be the managing partner of New Silkroutes Capital in the Americas, said that CG Capital had been looking to enter the US asset management market for some time as well as leverage "a number of long-standing business ties" to South Asia.

"When we met NSG it was apparent that we shared a very similar kind of vision for how a US asset manager could best service Asian investors," said Rice. "In the structured products segment we are looking at essentially two sets of products that we expect to offer. On one hand, what we call thematic funds offering exposure to large demographic themes on specific verticals or asset classes such as energy/resource, healthcare, IT and real estate."

According to Rice, these will be essentially pushed from CG Capital in Asia, while the other set of products will be demand driven, US specific and more opportunistic strategies for investors looking to take advantage of price and liquidity dislocations that may arise in the US market. "Our structured products offering will be originated in the US and delivered to Asian investors," said Rice.

New Silkroutes Capital owns 70% of the New York-headquartered joint venture, while CG Capital owns the remaining 30%. NSG, previously known as Digiland International Ltd, said the entry into fund management is part of a strategic shift for the group following its exit from the SGX watchlist in November 2014.

New Silkroutes Capital will target institutional and private wealth in Europe, the Middle East and North Africa, and Asia, particularly China. It will launch dedicated asset-management funds for specific verticals or asset classes, including energy/resource, healthcare, info-comm technology and real estate. The firm will also collaborate with banks and insurance companies in Europe and Asia to offer and launch private-label funds for distribution through established marketing networks in the key cities in which it operates.

NSG's chief executive Goh Jin Hian who also chairs New Silkroutes Capital board of directors said the new enterprise will seek to capitalise on the synergies between the two firms. "NSC is well positioned to tap the growing wealth management markets in Asia, [and] CG has deep expertise in developing sophisticated financial products," said Jin Hian. "The joint venture is a major milestone for New Silkroutes Group's business transformation. With experienced partners and access to global capital across key time zones, we are positioned to drive future growth of our business sustainably."

CG Capital's affiliated Finra-registered broker-dealer, CG Capital Markets, will continue to provide a range of financial products and services tailored for major institutions and their investor base in the United States. This partnership model will allow NSG's network of offices to focus on specific asset classes and strategies to harness the client base of CG Capital's network, and vice versa, according to Rice.

"In terms of distribution, the initial focus will be on serving our US client base in Asia, and then overtime we have also plans to rollout funds and structured products to institutional investors and family offices via our fund platform," said Rice. "We are purposely rolling out our offering in a very sequential way and with a long-term strategy. We want to demonstrate our success in Asia before we rollout to other markets such as Europe and the Middle East. Asian investors not only have the appetite but are getting increasingly knowledgeable and keen to invest in more sophisticated structured products and a wider range of asset classes."

New Silkroutes Capital principal place of business will be New York, from where it will service non-US tax resident clients, and will also have international representation in "key gateway cities" outside the United States. Both the New York and Singapore offices of New Silkroutes Capital will commence operations in March 2016. The international units are expected to roll out progressively in 2016 across London, Malta, Shanghai, Hong Kong, and Kuala Lumpur.

Rice has nearly 20 years of experience building and managing structured products and derivatives businesses. He started and led structured credit businesses at large investment banks including JP Morgan, BNP Paribas, Bank of America and UBS. As president of CG Capital Markets, he is responsible for business strategy and investment banking activities, as well as the origination, trading and distribution of all arranged capital markets products.

Additional reporting by Lyudmil Zahariev.

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