Strauss-Kahn to drive huge $2bn hedge fund in wake of scandal

DSK Global Investments hoping to profit from founder’s understanding of world finance

Former managing director of the International Monetary Fund Dominique Strauss-Kahn hopes the fund will profit from his  political and business connections. Photograph: AP

Former managing director of the International Monetary Fund Dominique Strauss-Kahn hopes the fund will profit from his political and business connections. Photograph: AP

 

Dominique Strauss-Kahn is seeking to launch a $2 billion hedge fund as the former French presidential-hopeful’s latest venture following the sex scandal that ended his political career.

The former managing director of the International Monetary Fund hopes the fund, DSK Global Investments, will profit from his understanding of world finance and political and business connections.

Associates of Mr Strauss-Kahn began to market the fund in China on Wednesday in advance of its official opening. If it were to achieve its $2 billion aim, it would be the fourth-largest European launch since 2008.

“We have received a warm welcome from the clients we have met so far; the response has been very enthusiastic,” said Mohamad Zeidan, chief operating officer of Luxembourg-based LSK & Partners, the banking boutique which will house the hedge fund.


Global macro fund
Mr Zeidan said DSK Global Investments would take the form of a so-called global macro fund, a hedge fund strategy that involves making bets on the direction of economies globally and across asset classes such as currencies, commodities and interest rates.

“This is going to be an investment vehicle that relies exclusively on the know-how and experience of a man who needs no introduction in the field of economic management,” Mr Zeidan said.

“The fund will utilise a wide range of different investments depending on [Mr Strauss-Kahn’s] economic analysis of geopolitical or geoeconomic events.”


Assault claim in 2011
Mr Strauss-Kahn was forced to leave the IMF and saw his hopes to become France’s socialist candidate for president torpedoed in 2011 after a maid in a New York hotel accused him of sexual assault. The criminal charges were later dropped and Mr Strauss-Kahn settled a civil case brought by the maid.

The fund is to focus on emerging markets, and intends to attract investment from Asian sovereign wealth and pension funds, as well as from wealthy individuals.

By targeting at least $2 billion in assets, DSK Global Investments will try to buck a challenging market in Europe for hedge fund launches.

DSK Global Investments is likely to adopt the “two and 20” fee structure: charging an annual 2 per cent fee on investment regardless of performance, and then 20 per cent of all profits, Mr Zeidan said.

About 40 people would be working for the fund based in Geneva, including Mr Strauss-Kahn’s daughter, Vanessa. – (Copyright The Financial Times Limited 2014 )