Owl Creek to Shut Asian Hedge Funds, Deregister Hong Kong Office

(Bloomberg) -- Jeffrey Altman’s Owl Creek Asset Management is winding down its Asian funds after the voluntary departure of Hong Kong-based co-manager Chris Wang, according to a regulatory filing.

The move is expected to cut New York-based Owl Creek’s assets to $2.3 billion, from about $2.6 billion at the end of February, the firm said in a filing to the U.S. Securities and Exchange Commission. It plans to deregister its Hong Kong office with the city’s securities regulator, it added.

Firms including TPG-Axon Capital Management, Hutchin Hill Capital and Gruss Capital Management have recently shut Asian offices amid market volatility and mounting investor discontent. Disillusioned with years of mediocre performance and high fees, investors pulled $70 billion from the $3 trillion hedge-fund industry last year, the first annual net outflow since 2009, according to Hedge Fund Research Inc.

Founded by Altman in 2001, Owl Creek invests in companies affected by corporate events, such as mergers and acquisitions and takes bullish and bearish bets on stocks and credit. Its $1.1 billion Owl Creek Overseas Fund returned almost 14 percent last year, ranking 42nd among funds with at least $1 billion of assets, according to an annual ranking by Bloomberg. Still, assets had fallen from almost $5 billion in February 2012, according to a marketing document at the time.

Owl Creek set up its Hong Kong unit in 2007, according to the latest regulatory filing. Wang, who joined in February 2008, opened the Hong Kong office and headed Asian operations, according to a 2016 marketing document. The office obtained a license from Hong Kong’s Securities and Futures Commissions in May 2011.

Fund Returns

Patrick Clifford, a spokesman for Owl Creek in New York, couldn’t immediately comment beyond the filing.

Owl Creek Asia Fund Ltd. started in July 2007 and had $364 million of assets at the end of February 2016, according to the marketing document. It was previously co-managed by Altman and Jeffrey Lee, who has since left. The fund returned an annualized 9.4 percent between inception and February 2016. It survived a near-21 percent loss in 2008 and a 2 percent decline in 2011. It retreated 5.5 percent in the first two months of last year.

Among the firms that have announced Asian office closures in the past year are some of the earliest to set up a presence in the region. TPG-Axon won a license for its Hong Kong office in 2005, and Gruss obtained its asset management license in the city in 2008.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net.

To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Peter Vercoe