Foundation Asset Management, the Hong Kong-based investment management firm, has launched the Foundation China Equity Fund, which is the firm’s first Securities and Futures Commission (SFC)-authorised fund. The mutual fund will be long with futures hedging.

At the same time the firm is adjusting its China-focused hedge fund’s investment approach.

The firm’s Foundation China Opportunity Fund, an equity long/short product launched in 2006, will take a more market-neutral approach, investing in more individual securities and taking on more short positions.

“We want to give investors a choice,” explained Michael Liang, Foundation’s founder and CIO. “If you want directional then there is the mutual fund. For market-neutral there is the hedge fund.”

Foundation, which currently manages around $250m, launched the mutual fund in order to take advantage of the growing wealth in Greater China.

“More and more money in China needs to be managed professionally. At the moment the options are limited to mainly passive vehicles. There is a demand among investors for absolute return strategies with active managers,” Liang added.

The retail fund will start with around $100m from cornerstone and seed investors before being marketed more actively.

Foundation also manages the Foundation USD Assets Income + Growth Fund, a multi-strategy product that invests primarily in the US markets. The firm hired former deputy CEO and head of fixed-income at CSOP Asset Management, Yanming Guo, at the start of 2018 to take on a deputy CIO role.

Foundation to tap retail investors with mutual fund launch on AsiaHedge.