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Asia Pacific Intelligence

Asia Pacific hedge fund industry news for October 2013

Thursday, November 07, 2013

AUSTRALIA

The Australian reported that self-managed super fund members who aren't investing in what are known as "alternative" asset classes such as hedge funds and private equity would have been startled last week by the Future Fund's explanation of why its performance has picked up so well. Meanwhile, a piece in Australia's Money Management, found that hedge funds 'add value' for retail investors, with an interview with Bennelong Funds Management chief executive officer Jarrod Brown claiming that the perception that hedge funds are too risky to add value to the retail space is ill-founded.

CHINA

The Wall St Journal reported that foreign hedge funds are warming to China, with a report that for now, foreign hedge funds aiming to invest in China's domestically traded assets are taking baby steps. The WSJ interviewed Global Advisors, a hedge fund specializing in commodities and based in Jersey in the Channel Islands, for example, aims to raise 150 million yuan ($25 million) from local investors initially.

The Guardian reported on China's moves to liberalise and its effect on hedge funds.

Writing in Hedgeworld, Laura Billings of US attorney Miller & Chevalier asked: "Will hedge funds' entry into China expose the industry to FCPA/UKBA enforcement?"

Opalesque reported on a number of media stories about a former Shanghai ghetto district becoming China's hedge fund hub. The stories detailed that Shanghai's Hongkou district was home before the country's Communist revolution to thousands of often stateless immigrants fleeing Hitler that lived in what was called the Jewish ghetto.   Landmark pre-war buildings in the area such as Broadway Mansions and the Astor Hotel are still standing, open as tourist spots and represent fairly well-preserved throwbacks to another era of the storied city's history.

Asian Investor announced that Saif Partners had an imminent hedge fund launch planned, coming to market with its first hedge fund, a Greater China-focused long/short strategy targeting $500 million.

HONG KONG

Reuters reported that Gottex has joined up with ex-Blackstone and Goldman executives to seed Asian hedge funds, via a partnership with Headland Strategic Ltd founded by Michael Garrow, an ex-Blackstone executive, and Johannes Kaps, who earlier worked at Goldman. The new initiative will offer hedge fund managers as much as $75 million each from next year. It aims to help them individually build a start-up capital of at least $100 million.

Asian Investor reported that the All-Stars Investment Fund has joined the list of upcoming hedge launches.

Investment Week reported that City Financial is preparing to launch an Asian macro fund for portfolio manager Geoffrey Barker, scheduled to launch in the first quarter of 2014 and that it will be a joint venture with City Financial Investment Company Hong Kong at its Hong Kong offices.

INDIA

The Hindu Business Line reported that Indian hedge funds snapped their losing streak, posting a 7.1% return for September.

JAPAN

Japan's hedge funds go from survival to revival reported Asian Investor (subscription).

Opalesque reported that SPARX has taken on the resurgence of Japanese equity with Shuhei Abe, the founder of SPARX Asset Management, Asia's largest hedge fund manager based in Tokyo, saying he has been very bullish since the beginning of this year, as Japan looks like it is ending its long-term deflationary super-cycle.

SINGAPORE

Bloomberg reported that Adam Levinson, chief investment officer of Fortress Investment Group Inc's Asia Macro funds, is in talks with the $58bn alternative asset manager about starting his own hedge fund firm.

Bloomberg reported that Blackstone is to open a Singapore office and will seek more investments in Southeast Asia, seven years after entering the Asia-Pacific region.

The Maples group is expanding its presence in the Asia Pacific region with the launch of the full service offering of  MaplesFS in Singapore. Eastern Fong, Regional Head of Fund Services - Asia, will head the Singapore team.

PAN ASIA

The Financial Times carried an interview with Rob Appleby of ADM Capital on the growing maturity of Asian hedge funds.

Another piece from the FT listed five Asian hedge funds to watch.

Investment & Pensions Asia reported on a survey from Manulife Asset Management that found that Asian retirement demand will drive foreign investment. The piece said that increasing demand among Asian pensioners for well-diversified and highly efficient retirement portfolios have made foreign investing increasingly necessary and new asset classes with the potential to deliver attractive returns are emerging.

Asian Investor found that insurers are looking to ETFs, hedge funds and property, particularly noticeable among respondents in China, Korea and Taiwan, which expressed a strong desire to increase allocations to hedge funds.

Another piece from Investment & Pensions Asia, reported that Asian families show preference for direct investment. The piece said that while the family office market in Asia lacks the maturity and experience in other regions, investors are growing more sophisticated in their choice of assets and their approach to risk management. The second annual survey published by UBS in association with Campden Research shows that family business in the region is the primary, and sometimes the only, driver of wealth among Asian entrepreneurs.

IPA also found that Asia's hedge funds are making moves to diversify strategies. MishaGraboi of PAAMCO commenting:  "These funds basically attempt to produce returns that are uncorrelated or less correlated to market returns while providing a reasonable performance level, allowing investors to effectively diversify their risks and get away from equity market risks that they face in Asia."

In terms of wealth, Asia is set to become world's richest region in 2014 overtaking North America as the world's richest region as early as next year, according to a latest report by Capgemini and RBC Wealth Management.

HFR reported that Asian hedge fund assets are up to over $103bn.

SOUTH KOREA

Business Korea reported on the birth of local investment banks. "Local securities companies with equity capital of over three trillion won (US$2.82 billion) are now allowed to handle business loans. At the same time, the prime brokerage service, which has been limited to domestic hedge funds, is allowed for financial companies, pension funds, and overseas hedge funds. This means that a new chapter has been opened for Korean investment banks in two years since major securities companies increased their capital by issuing new stocks to meet the three trillion won equity capital requirement."

The piece reports that Financial Services Commission selected five securities firms -- KDB Daewoo Securities, Samsung Securities, Woori Investment & Securities, Korea Investment & Securities and Hyundai Securities -- on October 30 as Korea's first investment banks. All of them have prepared themselves for the past two years, waiting for the revision on the Financial Investment Services and Capital Markets Act. They obtained the authorization for investment banking business on that day.

FinAlt reported that South Korea's sovereign wealth fund has poured some US$3 billion into alternative investments this year. The investments bring the Korea Investment Corp.'s alternatives holdings to roughly 10% of its $65 billion portfolio, chief investment officer Dong-Ik Lee told Pensions & Investments. KIC has set a 20% alternatives target, which Lee said it expected to reach over the next few years.

 
This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.
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