Asia Hedge Fund Startups See Signs of Revival After Slow '17
(Bloomberg) -- A slew of hedge funds are setting up shop in Asia, pointing to early signs of a revival after new starts slumped in 2017.
Long-time employees of Tybourne Capital Management, Moore Capital Management, Millennium Management and Soros Fund Management are striking out on their own. Global investors have renewed their interest in the region after Asia-focused funds were the top performers last year, and beat global peers in five of the past six years, according to data from Eurekahedge Pte.
An estimated 37 Asia-focused hedge funds started in 2017, the least since Eurekahedge started tracking data in 2000. There are signs things are looking up.
Hedge fund starts outstripped closures globally for the first time in two years in the third quarter, as investors took on more risk and managers cut fees, according to Hedge Fund Research Inc. Investors added almost $3.4 billion to Asia-focused funds in the three months through November, more than they poured into European funds, according to eVestment.
Still, investors are getting more selective. Last year, the average new fund started with $21.9 million, compared to $89.4 million in the heady days of 2004.
Here are some recent and future Asian startups. Details were provided by people familiar with the funds, who asked not to be identified because the plans haven’t been publicly disclosed.
Keyrock Capital Management
Jonathan Shih plans to start a hedge fund focused on rising and falling stocks in Asia-Pacific after leaving Tybourne Capital Management. Shih’s Keyrock Capital Management Ltd. plans to open in the third quarter, making long-term, concentrated investments in small- or medium-sized companies. Shih focused on the consumer industry at Tybourne, a firm started in 2012 by former Lone Pine Capital Asia head Eashwar Krishnan that now manages about $5.5 billion.
Toona Tree Capital
Toona Tree is led by Chen Chen, a former partner at Eric Mindich’s Eton Park Capital Management, the hedge fund that last year announced plans to unwind. Chen’s long-short fund started trading Nov. 1 with more than $100 million, making it one of last year’s biggest startups. Toona Tree invests in China and Hong Kong-listed stocks, as well as other companies that count China as a big business driver.
Yunqi Path Capital
Chris Wang, a former co-manager of Owl Creek Asset Management’s Asia funds, plans to start his own long-short fund focused on North Asia stocks in the second quarter. The fund will make more bullish than bearish bets, with five or six ideas contributing the majority of returns. Wang aims to start with as many as 10 employees and has hired Ed Littmann, a former head of equity manager research at Chicago-based Mesirow Financial Holdings Inc., as chief operating officer.
Trikon Asset Management
Gaurav Grover’s long-short equity fund is set to be one of the year’s most-high profile startups, given the 41-year-old’s pedigree and backers. He has commitments from Louis Bacon’s Moore Capital Management, where he worked for eight years, and HS Group, a strategic investor in up-and-coming hedge funds. Also on board are some partners at former employers TPG and Silver Lake.
Hari Ravisankar’s fund is off to a flying start, returning 13 percent in its first four months. The fund seeks to make concentrated, long-term investments in future industry leaders -- Ravisankar helped his previous employer Janchor Partners make an eight-fold return on its investment in Alibaba Group Holding Ltd.
APTA, whose fund focuses on Asia-Pacific technology stocks, started trading Jan. 1 with $163 million. Jeff Zielinski, the Hong Kong-based APTA head, returned almost 23 percent in 2017, said Jay Luo, president of Dymon Asia Capital (Singapore), which had supported him for the past two years. A former Morgan Stanley technology banker and one-time China business development head at Rupert Murdoch’s News Corp., Zielinski also worked for Goldman Sachs Group Inc.’s principal strategies proprietary trading unit.
Ovata Capital Management
The Hong Kong-based firm is led by James Chen, who most recently ran the Asia equities team at Michael Platt’s BlueCrest Capital Management. The Asia-focused stock fund started trading Dec. 1 with more than $200 million of internal money and capital from an unidentified anchor investor. Assets are expected to top $300 million by March and it will stop taking money from new investors when it reaches $500 million.
Inventio Capital Management
Wang Dawei plans to open a long-short equity fund focused on Asian stocks in early April, after spending almost eight years at Soros Funds Management. His Hong Kong-based firm will start with seven people. Julian Zhu, a former Goldman managing director who led the bank’s Asia-Pacific commodities research, has taken an equity stake in Inventio but won’t be involved in day-to-day operations.
Ayan Sen is opening his own hedge fund firm in April with $400 million from Izzy Englander’s Millennium, where he has worked since 2009. He plans to raise a further $200 million in each of the first two years, ranking it among the largest Asia macro startups in recent years. Sen, based in Singapore, has traded Asian interest rates and currencies for Millennium.
Disciplina Asset Mangement
Kennie Atle Johansen will this month start a $110 million market-neutral quant fund trading Asia-Pacific stocks. Johansen, who was most recently at WorldQuant -- which managed money for Millennium -- will continue with a strategy of holding an average 2,000 positions.
Blue Swell Asset Management
Tomofumi Oda plans to start his own firm betting on rising and falling Japanese stocks, according to a memo seen by Bloomberg. He was most recently a portfolio manager at Point72 Asset Management, billionaire Steven Cohen’s $11 billion investment firm. Singapore-based Oda had started Blue Swell Asset Management in 2016 as a unit of Point72 to have greater autonomy after running a Japan equity strategy at the firm for six years.
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