Singapore Hedge Fund

Alternative asset management in Singapore

Temasek,Bank of China unit plans $1-2 bln fund

Singapore’s Temasek is in talks with a unit of Bank of China to launch a US$1 billion to US$2 billion investment fund to focus on fast-growing infrastructure projects across the vast nation, sources said on Thursday.

Talks between Singapore’s sovereign wealth fund andvBOC International, the Hong Kong-based investment banking arm of Bank of China, were in early stages but both had agreed on the general idea of the fund plan, initiated by the Chinese bank, said the sources with direct knowledge of the plan.

Temasek and Bank of China aimed to set up a joint ventue to manage the fund, which would seek investment opportunities emerging from China’s 4 trillion yuan ($585.5 billion) economic stimulus package launched late last year, the sources said.

The sources declined to be identified as negotiations between the two parties are confidential.

With Reuters.

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Viathon Capital Launches New Credit Hedge Fund

I know it’s in the US but I always like a new “credit opportunity fund”…

Viathon Capital, LP has officially launched the Whitewater Master Fund, LP, a credit opportunity fund focused on non-correlated absolute returns.

Employing a fundamental, credit-intensive research process in order to identify long and short investment opportunities in the United States and Europe, the hedge fund’s objective is to seek long term capital appreciation by investing in high yield and investment grade corporate bonds and bank debt.

As part of this launch, Viathon Capital has affiliates of Citigroup Alternative Investments, LLC (CAI) as its seed investor in this new fund. The fund launched in May of 2009 with $50 million in capital and had a net return of +0.92 % for the month of May and estimates +2.10% for June bringing it’s inception to date return to approximately +3.02%.

Viathon Capital’s team includes four investment professionals and two
trade support/back office personnel with backgrounds from Marathon Asset Management,
Goldman Sachs, Merrill Lynch, Neuberger Berman, SAC/Sigma, Providence Investment
Management and Lehman Brothers.

Big Thank You to Hedge Fund World for the news

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Brummer & Partners launches Karakoram in Singapore

Singapore is reallybecoming the place to be for new Hedge Fund…

Brummer & Partners, Sweden’s largest hedge fund manager, has set up an office in Singapore and is launching a long-short fund focusing on Asian ex-Japan equities, sources familiar with the firm said.

The fund, called Karakoram, will be launched on Wednesday and has an initial capital of $80 million, most of which is seed money from the parent firm, the sources said. The fund hopes to notch an annual net return of 15-20 percent.

Brummer is one of the more high profile hedge fund launches seen in Singapore over the last few months. The company declined comment on the launch of the fund.

Karakoram is a large mountain range spanning the borders between India, Pakistan, and China.

Brummer is a privately-owned hedge fund manager with about $5.2 billion in assets under management spread over several funds. Its portfolio managers typically have fairly large stakes in the funds they manage.

Karakoram is charging an annual management fee of 1 percent plus 20 percent of returns that exceed a pre-agreed target, which is lower than the traditional 2 and 20 percent charged by most funds in the past, according to company documents seen by Reuters.

Brummer’s venture into Asian equity comes during a rally in Asia ex-Japan stocks .MIAPJ0000PUS which have risen 34 percent so far this year, outperforming the 1.8 percent gain in the S&P 500 .SPX and the 2.2 percent rise in European stocks .

The improvement in investor sentiment has slowed redemptions at global hedge funds, and many industry players expect Asian and other emerging market funds to see net inflows in the current quarter.

Brummer’s five-man Singapore team is led by Chief Investment Officer Chia Ee Toh, who was previously with Amaranth Advisors and Schroder Investment Management.

According to Lipper, a unit of Thomson Reuters, Brummer also operates a fund of hedge funds structure that invests in the firm’s various funds. The Swedish firm has been looking to bring in new investment teams to broaden the range of strategies it offers clients.

With Reuters

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A new credit hedge fund in Singapore: SaKa Capital

Another day, another Credit Hedge Fund… I am starting to see a pattern here 😉

June 26 (Bloomberg) — Assan Din, a former Lehman Brothers Holdings Inc. credit trader, is setting up a hedge fund to trade corporate bonds and derivatives in Asia.

SaKa Capital’s fund, which will have a capacity of more than $500 million, will start in September with $25 million to $50 million sourced mainly from founding members and friends, Din, 38, said. The Singapore-based firm will subsequently raise capital from institutional investors, including U.S. pension funds and endowments, once it builds a track record, he added.

“We chose Asia because we believe over the next few years there will be a lot of great opportunities to make money in the credit markets here,” Din, who ran Lehman’s credit trading businesses in Europe and Asia from 1998 till 2006, said yesterday. “If there is any region that is going to grow, it will be Asia.”

SaKa Capital, named after the ancient nomadic tribe that conquered parts of Asia, is seeking to take advantage of trading opportunities in credit markets as financial companies become more averse to risk. Financial institutions worldwide have reported almost $1.5 trillion of losses since the U.S. subprime mortgage market collapsed, data compiled by Bloomberg show.

“The days of large principal businesses at banks competing with hedge funds is over for the foreseeable future,” Din said. “Banks and existing funds are suffering from illiquid legacy positions on their balance sheets and hence are handicapped to take advantage of the credit opportunity today.”

Uncertainty, Opportunity

The SaKaCapital Liquid Credit Fund will target annual returns of about 15 percent, with “moderate leverage,” said Din, who joined Lehman in 1997 as a credit derivatives trader in London. Lehman in September filed for the biggest bankruptcy in U.S. history.

He headed European and Asian operations for Lehman’s $8 billion global principal strategies group, and helped set up R3 Capital Management LLC in May last year when Lehman spun out the unit. He left R3 before the hedge fund was taken over by New York-based money manager BlackRock Inc. in April this year.

Din was Lehman’s London-based head of European credit trading from May 2004 to June 2006, after running the bank’s credit trading business in Asia outside of Japan for six years.

The fund will trade corporate bonds and derivatives, convertible debt, credit indexes as well as options, focusing on securities that are liquid, or are easily traded, Din said. It will also use equities markets to hedge.

“There’s still a lot of uncertainty in the markets and a lot of opportunity to make money right now, particularly in credit markets,” Din said. “It’s a great time to make money in the markets; it’s not the best time to raise money.”

Benchmark gauges of corporate credit risk rose earlier this week after the World Bank warned the global recession will be deeper than previously forecast.

Jean Viry-Babel
senior partner
VBK partners

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Flowering Tree Investment Management Pte

I came across this new fund on Bloomberg… worth keeping an eye on…

June 4 (Bloomberg) — Flowering Tree Investment Management Pte, set up by the co-founder of New York-based Sansar Capital Management LLC, plans to grow its Asian equities hedge fund by about 20 times its starting capital within the next two years.

The Singapore-based fund made its first bets on rising and falling stocks in Asia outside Japan last month, starting with $12.5 million sourced from founding members, family and friends, founder Rajesh Sachdeva, 40, said in an interview yesterday. It will grow to $15 million to $16 million by July, and plans to reach $200 million to $300 million in two years.

Flowering Tree’s startup will have to source funds from a smaller pool after clients withdrew almost $24 billion from the region’s hedge funds last year, according to Eurekahedge Pte data. An index tracking Asia-focused long-short funds rose 4.2 percent in April, the best performance of nine groups followed by Singapore-based Eurekahedge, after the strategy slumped 22 percent in 2008 in the industry’s worst year on record.

“Equity-focused funds right now would probably be able to pull in some money given the optimism in the market, although a lot of people believe this rally might end pretty soon,” said Ankur Samtaney, an analyst at Eurekahedge. “Investors and managers are taking a cautious approach at this time.”

The regional benchmark MSCI Asia-Pacific excluding Japan Index has rallied 63 percent since its March 2 low after tumbling 53 percent last year. Members of the index are valued at an average price of 1.8 times the book value of their assets, compared with 2.5 times in 2007, before stock markets collapsed, according to data compiled by Bloomberg.

‘Fertile Environment’

A “fertile environment for stock picking,” will help the fund build a track record to lure investors, Sachdeva said. “It’s a great time to be picking stocks right now; it’s not a great time to raise money.”

Sachdeva was a partner from 2005 to 2008 at Sansar Capital, a New York-based firm that manages an Asian equities hedge fund, where he helped assets under management grow to $3 billion. He was unable to give performance details for the Asian fund.

He was previously an investment analyst at Kingdon Capital Management LLC and Alliance Capital Management Holding LP, now known as AllianceBernstein Holding LP.

Flowering Tree’s new fund’s equity long-short strategy is more likely to work this year and in 2010 than last year, when companies’ fundamentals were ignored during “a period of extreme market dislocation,” said Sachdeva.

Sachdeva said the fund will reduce its long and short positions in volatile markets.

Reinvesting

“You size up your balance sheet significantly when it’s working and significantly shrink your balance sheet when it’s not,” Sachdeva said.

Flowering Tree, which has a team of 10, including four investment professionals, has set aside $4 million in capital to fund its business for at least two years, Sachdeva said.

“I’m lucky that my previous startup was relatively successful and was profitable for me, so I’m reinvesting some of those profits and starting an organization like this upfront, as opposed to building it out at a later stage,” he said.

Investors are likely to put money into Flowering Tree’s hedge fund from the end of the year, he added. The hedge fund, which targets average annual returns of “mid-teens to high- teens” over five years, has the capacity to grow to $1 billion to $1.5 billion, he said.

From  Bloomberg

Jean Viry-Babel
senior partner
VBK partners

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