Alternative Market Briefing

Three Arrows Capital to launch Asia Arbitrage Fund

Thursday, August 09, 2012

Bailey McCann, Opalesque New York:

Three Arrows Capital LLC is launching a new Asian Arbitrage Fund in September. The fund will focus on Asia market neutral liquidity constrained arbitrage. Kyle Davies will serve as Chairman and Chief Risk Officer and Su Zhu will serve as Chief Executive Officer. Davies worked at Credit Suisse in Equity Exotic Derivatives, Corporate Derivatives, and Convertible Bond Trading Groups. Zhu worked at Credit Suisse in Equity Exotic Derivatives, Flow Traders in ETF, and Deutsche Bank in Absolute Strategy Groups.

Davies and Zhu have an organic growth story over a decade of knowing each other. They met in high school at Phillips Academy, studied together at Columbia University, and then worked with each other in Hong Kong in various derivatives trading roles. The two traders began developing high alpha liquidity constrained strategies a little over a year ago and decided earlier this year that it was time to found Three Arrows Capital. The fund was then seeded by co-workers, several fund managers, and family offices.

According to Davies, capacity constrained strategies can offer attractive returns. The fund’s primary focus is ETF's, although he expects to build a portfolio of capacity constrained strategies in the future. "I am a firm believer that additional alpha that can be generated from capacity constrained strategies. That is a cornerstone philosophy of our fund investments and I think investors will be pleased with the p......................

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