Singapore Hedge Fund

Alternative asset management in Singapore

China's sovereign-weath fund commits $1 billion to Oaktree Capital…

A Los Angeles investment firm has come out a big winner in the battle among some of world’s best-known money managers vying for a slice of cash from China’s sovereign-wealth fund.

China Investment Corp., which is doling out billions of dollars as it tries to profit from a global economic recovery, has committed to invest about $1 billion with Oaktree Capital Management LP, people familiar with the matter said. The big allocation comes as the Chinese fund stands poised to make a wave of investments directly into hedge funds around the world.

For more than a year, big-name money managers have aggressively courted CIC, as China’s fund is known, looking to Beijing for cash and its influential stamp of approval as anxious investors pulled money out of their funds amid the financial crisis.

“CIC represents one of the biggest investment opportunities in the world,” says Jake Walthour, who as head of advisory services at Aksia LLC comes into contact with hundreds of hedge funds as he helps investors decide where to put their money.

Oaktree is expected to invest CIC’s money over the course of several years in distressed debt and other fixed-income assets, and it adds to other inflows to the firm this year, people familiar with the matter say. Oaktree oversees more than $60 billion, making investments in a variety of realms, from debt of battered casino operators to buying whole companies.

An Oaktree spokeswoman declined to discuss the matter. A CIC representative didn’t respond to a request for comment.

Oaktree was founded in 1995 in Los Angeles and New York by a team of debt investors including Howard Marks, who is still its chairman. In July, Oaktree was among nine big asset-management firms chosen by the U.S. Treasury as fund managers for the Public-Private Investment Partnership, or PPIP, the government program designed to rid banks of toxic assets.

In recent months, CIC has emerged as the most active government investment fund on the world stage, deploying portions its $300 billion portfolio in deals as diverse as natural resources and real estate, aiming to catch the upside of what its leaders expect to be a global rebound. J.P. Morgan Chase & Co. China analysts estimate that altogether CIC will spend as much as $50 billion on new overseas investments this year.

CIC is expected to funnel an additional $2 billion directly into hedge funds in the coming months. To score a spot on the list, some of the world’s most famous hedge-fund managers have made a pilgrimage to the 300-foot-tall glass-walled atrium of New Beijing Poly Plaza, CIC’s headquarters in the Chinese capital, to pitch their services. They include Eton Park Capital Management boss Eric Mindich and Paulson & Co.’s John Paulson, whose firm made a mint in 2007 betting on a housing-market downturn.

0Already this summer, CIC has funneled a billion dollars into hedge funds, though indirectly. It has channeled that money through two so-called funds of hedge funds—that is, managers that farm out pools of money to dozens of funds—that are run by Blackstone Group LP and Morgan Stanley. CIC owns stakes in both firms, making them familiar partners as it dips its toes into the hedge-fund world. Last year, CIC made a big private-equity investment with J.C. Flowers & Co., allocating $3.2 billion for opportunities among financial institutions.

Big Score for Capula

As CIC picks up its hedge-fund investments, lesser-known names also are getting a shot. Capula Investment Management LLP, a London-based firm started in 2005 overseeing $3.6 billion in fixed-income assets, received $200 million from the China fund in August, according to people familiar with the situation.

Capula is led by Yan Huo, the son and grandson of Chinese physicists who earned a doctorate in electrical engineering from Princeton University and went on to trade proprietary capital at J.P. Morgan Chase & Co. CIC scrutinized Capula’s operations and performance for more than a year before finalizing its decision, a person familiar with the matter says. The allocation came after Capula gained 9.5% in 2008, a year when most hedge funds lost money.

Fund managers are known to travel the globe hunting for new money, but rarely have so many influential managers gone to such lengths to secure funds from one source.

Gaining Sway

Other sources of capital grew scarce in the wake of last year’s market turmoil. Risk appetites have been low at other sovereign funds in the Middle East and Singapore that took a big hit on investments last year. Their pullback has helped increase China’s clout in the hedge-fund industry.

Other hedge-fund names mentioned in recent weeks as potential front-runners for CIC money, according to people familiar with the matter, include Winton Capital Management and Lansdowne Capital Ltd., both of London; Och-Ziff Capital Management Group LLC in New York; and Los Angeles-based Canyon Partners. Representatives for the firms declined to comment.

Daniel Och, the former Goldman Sachs trader who started Och-Ziff in 1994 and took it public in November 2007, met with CIC in Beijing just this month, people familiar with the matter say.

Other managers who have met with CIC include Renaissance Technologies LLC and Citadel Investment Group LLC, people familiar with the matter say. CIC insiders have suggested to advisers that performance concerns at those firms in the past year could hurt their chances of receiving allocations, at least in the short term, people close to the matter say. Representatives for the firms declined to comment.

CIC’s Gatekeeper

At the center of CIC’s hedge-fund vetting stands Felix Chee, a Singapore native who formerly oversaw the University of Toronto’s endowment fund. While CIC at times has had problems attracting experienced investment professionals, in part due to pay constraints, Mr. Chee has a deep understanding of asset allocation and corporate finance, people who have met with him say.

CIC has pushed hard for breaks in fees that could total hundreds of millions of dollars in coming years, according to people familiar with the matter. CIC has considered allocating money to SAC Capital Advisors LP chief Steve Cohen, who has hosted CIC decision-makers at his mansion in Greenwich, Conn. SAC has a strong track record, but CIC has expressed hesitation to pay Mr. Cohen’s fees, which are some of the industry’s highest, these people say. A spokesman for SAC declined to comment.

Droves of investment titans flying in from around the world occasionally have posed logistical snags, with CIC and others sometimes asked to intervene on behalf of fund bosses requesting Beijing landing slots, people familiar with the matter say. The slots are limited and controlled by the Chinese air force. For example, last year as Beijing was hosting the Olympics, Blackstone needed help in getting a landing slot for its chief, Stephen Schwarzman, arriving in his private jet.

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Singapore's sovereign wealth fund's $1.6 billion Profit on Citigroup

Looks like the buy and hold strategy worked out for Singapore’s sovereign wealth fund, after it notched a $1.6 billion profit on a partial sale of its Citigroup Inc. (NYSE:C) stake. The Government of Singapore Investment Corp., or GIC reduced its holding of Citi to 5% from 9%, exchanging its $6.88 billion of convertible preferred stock for Citigroup common stock, it said in a statement. The conversion price was $3.25 per share.

In addition to the sale, GIC can boast of a $1.6 billion paper profit on its remaining stake, according to Bloomberg.

Although Citigroup itself remains mired in toxic assets, GIC’s investment in the bank has fared far better than the investments of other sovereign wealth funds in the financial sector.

A different Singapore wealth fund, Temasek Holdings Pte., took a hit on the sale of its stakes in Bank of America Corp. (NYSE:BAC) and Barclays plc (NYSE:BCS). The Singapore government-controlled entity was Merrill Lynch & Co.’s largest shareholder with a 7.5% stake at the time it was purchased by BofA. Temasek had put $5 billion into Merrill at $48 a share between December and February, but a reset payment and additional $900 million averaged out the fund’s buy-in price to only $23.11 a share, based on Bloomberg calculations from exchange filings. Bank of America’s original stock offer came in at $29 a share, giving Temasek a $1.5 billion profit, but the markets weren’t kind to the stocks of either BofA or Merrill, which continued to fall before the deal closed, leaving Temasek’s investment in the loss column.

For its part, China’s sovereign wealth fund China Investment Corp. hasn’t been swayed by its investments in Blackstone Group LP (NYSE:BX) and Morgan Stanley (NYSE:MS) still being under water. The fund is doubling down on private equity, hedge funds and fund-of-funds investments in hopes of capitalizing in 2008’s drop in valuations. In spite of the fund’s $297.5 billion portfolio losing 2.1% in 2008, CIC said that it plans on investing $6 billion in hedge funds by the end of 2009.

In June, CIC put $500 million into a Blackstone hedge fund unit and bought another $1.2 billion of Morgan Stanley’s stock. The fund had famously paid $3 billion for a 9.9% stake in Blackstone right before the private equity firm’s 2007 IPO, only to see the value of its stake get crushed when the credit crisis set in and large LBO activity ground to a halt. CIC later increased its stake to 12.5%. Shares of Blackstone closed at $14.89 on Friday, off more than 50% from their IPO price of $31. Morgan Stanley currently trades at $32.53, topping the $28 to $31 range it saw in June. – From the deal

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Worldwide Hedge Fund Rankings 2009: Top 10 List

1. Paulson Advantage Plus
Fund Asset: $2,171
Strategy: Event Driven
3yr annualised rtn: 62.67%
2008 rtn: 37.80%
Company: Paulson
Location: New York
Firm Asset: $30,000

2. Balestra Capital Partners
Fund Asset: $800
Strategy: Global Macro
3yr annualised rtn: 61.24%
2008 rtn: 45.78%
Company: Balestra Capital
Location: New York
Firm Asset:$990

3. Vision Opportunity Capital
Fund Asset: $357
Strategy: Relative Value
3yr annualised rtn: 61.13%
2008 rtn: 6.96%
Company: Vision Capital
Location: New York
Firm Asset: $733

4. Paulson Enhanced
Fund Asset: $2,535
Strategy: Merger Arbitrage
3yr annualised rtn: 46.81%
2008 rtn: 12.45%
Company: Paulson
Location: New York
Firm Asset: $30,000

5. Quality Capital Mgmt – Global Diversified
Fund Asset: $747
Strategy: Global Diversified
3yr annualised rtn: 36.22%
2008 rtn: 59.51%
Company: Quality Capital Mgmt
Location: Weybridge, U.K.
Firm Asset: $777

6. Altis Global Futures Portfolio – Composite
Fund Asset: $1,340
Strategy: Managed Futures
3yr annualised rtn: 32.89%
2008 rtn: 51.93%
Company: Altis Partners
Location: Jersey, Channel Islands
Firm Asset: $1,340

7. Belvedere Futures Strategy
Fund Asset: $365
Strategy: Managed Futures
3yr annualised rtn: 32.00%
2008 rtn: 14.41%
Company: Belvedere Adv
Location: San Francisco
Firm Asset: $365

8. Pivot Global Value
Fund Asset: $754
Strategy: Global Macro
3yr annualised rtn: 30.83%
2008 rtn: 51.90%
Company: Pivot Capital
Location: Bermuda
Firm Asset: $754

9. RG Niederhoffer Diversified (Offshore) Class B
Fund Asset: $752
Strategy: Global Macro
3yr annualised rtn: 30.67%
2008 rtn: 50.28%
Company: RG Niederhoffer Capital
Location: New York
Firm Asset: $1,758

10. Horseman Global
Fund Asset: $3,863
Strategy: Equity Long/Short
3yr annualised rtn: 29.95%
2008 rtn: 31.26%
Company: Horseman Capital
Location: London
Firm Asset: $6,300

You can find the original data on the Barron’s Hedge Fund Rankings 2009: Top 100 List

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Billionaire Modi Seeks Island Resorts in Distressed-Asset Quest

Billionaire Bhupendra Kumar Modi, who made his fortune from mobile-phone services in India, is planning to invest $100 million in distressed assets including the island resorts on Batam and Bintan neighboring Singapore.

Modi, chairman of Singapore-based Spice Global with interests from telecommunications to financial services, said he is in talks to buy stakes in all the resorts on the Indonesian islands and wants to transform them into entertainment hubs, flying in Bollywood stars and eventually adding casinos.

“There’s nothing near Singapore as beautiful as these two islands, but they are distressed,” the 60-year old said in an interview at his 63rd-floor penthouse overlooking the casino- resort being built by Las Vegas Sands Corp. “There are a lot of situations emerging where the actual asset is good, but it is distressed because the situation around it is not right.”

Modi, who last year moved from Beverly Hills to Singapore, is aiming to fill a gap left as firms such as Blackstone Group LP and Och-Ziff Capital Management Group LLC scaled back plans to buy distressed Asian assets. He has set aside $100 million for special situation investments, which seek to profit from events such as spin-offs.

He plans to invest with distressed specialists, including hedge-fund firm 3 Degrees Asset Management Pte and former traders from Lehman Brothers Holdings Inc. who are opening their own shop to take advantage of rising Asian corporate defaults.

3 Degrees

Modi earned 21 billion rupees ($434 million) selling his stake in Noida, Uttar Pradesh-based Spice Communications Ltd. to Idea Cellular Ltd. last year. He said he has a net worth of $1.5 billion to $1.6 billion and cash of $700 million to $800 million.

Spice Global is planning a $1 billion initial share sale, Modi said in June.

He plans to invest $20 million in a private-equity fund managed by 3 Degrees to buy a stake in a resort in Bintan through the Singapore-based distressed asset manager.

Modi said he seeks management control of the companies he invests in. He became chairman of the board of MediaRing Ltd. and replaced its chief executive officer and chief financial officer after agreeing to buy as much as 20 percent of the Singapore-based Internet telephony firm for about S$60 million ($42 million) last month.

The billionaire said he expects returns of more than 100 percent if he can change the way Bintan and Batam, 45 minutes from Singapore by ferry, are being run. He will engage policy makers in Singapore and Indonesia to develop infrastructure and promote more visitor arrivals there, he said.

Supply-Demand

About $1 trillion of corporate debt is stressed and distressed in Asia today, with only about 10 “substantially capitalized” distressed investing firms chasing it, according to Robert Petty, New York-based co-founder of Clearwater Capital Partners LLC, which manages a $1.7 billion fund of Asian distressed assets.

“The supply-demand mismatch is interesting,” he said. “Today is an extraordinary market opportunity if you have the depth of team to be able to do all dimensions of distressed.”

Bonds are termed distressed when they yield at least 10 percentage points more than similar-maturity government notes. Near-distressed or stressed bonds have yield premiums of between 7 percentage points and 10 percentage points.

Asia-focused distressed and event-driven hedge funds and private-equity firms manage about $67 billion in assets, according to Eurekahedge Pte, a Singapore-based data provider.

Record Defaults

Standard & Poor’s expects “record levels of defaults” in Asia as the global recession hurts the region’s export-dependent economies and leveraged industries, it said in a June 1 report. Nine rated borrowers defaulted in the first five months of the year, matching the peak of the region’s 1998 financial crisis, S&P said.

“There will be a shedload of money to be made in Asian distressed over the next 18 to 24 months,” said Michel Lowy, former head of Asia-Pacific Strategic Investment Group at Deutsche Bank AG, who has been investing in distressed assets for 13 years.

Lowy is starting SC Lowy Financial (HK) Ltd., a Hong Kong- based distressed investment business which will focus on the region, and will seek “all asset classes within the illiquid value investment space” including special situations and distressed. Investment opportunities in this area will likely peak in one to three years, he added.

Lowy said his most successful deal while at Deutsche Bank was the German firm’s investment and reorganization of Spice Communications. He declined to say how much the bank made because the information is private.

SSG Capital

Hedge-fund managers investing in Asian distressed debt returned 1 percent in the first eight months of 2009, according to Eurekahedge. Asia-focused event-driven funds gained 16 percent.

Edwin Wong, an ex-Lehman managing director, set up SSG Capital Management with former colleagues including Andreas Vourloumis to start a fund to invest in distressed assets in Asia outside Japan. Modi said he plans to co-invest with Vourloumis, who made money for Lehman investing in Spice Communications. Vourloumis was not immediately available for comment.

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Fullerton aims to extend Singapore’s reach by wooing the European investor

The city state of Singapore punches well above its weight in the world of investment. Between them Temasek Holdings and the Government of Singapore Investment Corporation, the tiny nation’s twin sovereign wealth funds, manage an estimated $400bn (£245bn, €280bn) of assets.

But Singapore is not resting on its laurels; it is about to wade into the congested European asset management industry as part of a plan to raise its assets under management higher still.

Fullerton Fund Management, the funds offshoot of Temasek, currently manages just $2.3bn of external money, in addition to the assets of its parent.

But Fullerton hopes to bolster this tally by launching its first European Ucits funds via the migration of two existing vehicles from the Cayman Islands to Luxembourg before the end of the year.

Gerald Lee, chief executive and founder of Fullerton, believes the move is essential to crack the European market, which currently accounts for just 5 per cent of its customer base.

“We have funds registered in Singapore as well as in the Cayman Islands but there’s just no way we can penetrate the [European] market, if the fund structure is not right. We realise that if we don’t put funds on a Ucits platform we can be marketing here every day, but we won’t get a single cent.”

Fullerton’s initial offerings will reflect its expertise in Asian securities, but with an interesting twist. One fund, Fullerton Asian Equities, is a straightforward relative return product. But the other, Fullerton Absolute Return Asian Equities, is a market timing vehicle which allows the manager significant freedom to switch between equities and cash in anticipation of market rallies and slumps.

Mr Lee is adamant that his managers are able to time the markets in this manner, in spite of the fact that many of the world’s most successful equity managers say such timing abilities are beyond them.

“The whole idea is to take away enslavement to the index. We discover that the moment you do that, actually equity managers do have a very great sense of market timing, contrary to popular belief,” says Mr Lee, who was head of fixed income sales at SBC Warburg Singapore and deputy chief investment officer at Deutsche Asset Management Singapore prior to joining Temasek in 1999.

“I come from a fixed income background, I spent my years in a business as a fixed income manager, so I always found it very perplexing that equity managers claim that they don’t know how to time the market.

“Here I was trading bonds and managing bond portfolios knowing that, actually, it’s not a very difficult call. You don’t need to be somebody with high IQ, you just need to have a very good sense of what is happening.

“You always know when the market is overbought and you know when the market is oversold. Equity managers are capable of market timing and we want to put that to good use.”

Even armed with this information, picking turning points is notoriously hard. During the latter stages of the 1990s bull market, many managers were all too aware that a host of technology, media and telecoms stocks were wildly overvalued, but those managers brave enough to exit these sectors suffered as the TMT bubble continued to inflate, and in many cases lost their jobs as a result.

Mr Lee is aware of the difficulties, but believes the answer is to mandate absolute return managers to beat deposit rates by 5 to 7 percentage points a year over the cycle.

They are likely to exceed this in a bull market, even if they have not participated fully in the rally, giving them the freedom to bail out without being fearful as to their future employment prospects.

“The absolute return guy actually knows how to take money away from the table when things are overheated,” argues Mr Lee. “Where he really adds value is when the market starts falling apart and he has everything very nicely in cash.”

According to Mr Lee, Fullerton first trialled market timing with some of its equity managers five years ago, and the experience has been “very pleasant”.

However, the experience of the Fullerton Absolute Return Asian Equities fund since launch in 2007 has been somewhat less pleasant. During 2008 it lost 37 per cent, against a 52 per cent drop in its underlying Asia ex-Japan index.

Mr Lee largely blames investors for this state of affairs arguing that, with the fund launched during a bull market, investors were unwilling to accept Fullerton’s recommendation that the “neutral” equity weighting should have been 30-50 per cent and instead insisted neutral should be 70 per cent.

“They wanted to have their cake and eat it,” he says.

Fullerton also has plans to go after US investors, but these are unlikely to be firmed up until next year at the earliest, when it is able to start learning some of the lessons from its European push.

In spite of the imminent migration of two of Fullerton’s vehicles from the Caymans, Mr Lee is reluctant to sound the death knell for the Caribbean offshore financial centre, which some see as a potential loser from moves by the US and Europe to stem tax avoidance and tighten regulation of the financial system.

“There is a critical mass of excellence in the Caymans, in terms of people knowing the legal and administrative aspect, so I think they continue to have the advantage,” he says.

Yet, following budget changes in February which improved the tax treatment of funds in Fullerton’s home market, Mr Lee adds: “I can see that more and more hedge funds domiciled in Singapore may not find it necessary to incorporate their funds in Cayman as before.”

Further change may be afoot for Fullerton, however. Last month, Temasek said it would be prepared to list some of its biggest holdings, such as port operator PSA and Singapore Power, adding that even Fullerton itself could be suited to a float.

http://www.ft.com/cms/s/0/42d49b3c-9979-11de-ab8c-00144feabdc0.html?nclick_check=1

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Boris tries to save london's first place!

Boris Johnson

Boris Johnson

Mr Johnson was there to argue against “enormously damaging” plans to tighten regulation, saying that it would drive jobs in the capital elsewhere and cost the UK billions in tax revenues as business relocated to other financial centres such as New York and Singapore.

“After a series of meetings I am confident we have successfully made a concrete and sensible argument,” the Mayor said. “Amongst the British MEPs I met, there was widespread recognition of the potentially damaging effect that the directive, in its current form, will have on London, the UK and Europe. I was encouraged by MEPs to continue to lobby for the modification of the directive.”

Mr Johnson said that he had a “very friendly, warm and constructive” meeting with Charlie McCreevy, the EU Commissioner responsible for the regulation of financial services.

“Commissioner McCreevy realises the importance of the capital’s financial services industry to London, as well as Europe, and recognises that the directive will be, and should be, amended as it makes its journey through the European Parliament. He encouraged us to continue to play our part in this process and I fully intend to do so,” the Mayor added.

He has maintained throughout that the draft directive is unduly harsh on hedge funds and private equity, which he says were not to blame for the financial crisis. He said he is in favour of “proportionate regulation” but argued in its current form it would cut off a vital supply of investment funding from an industry which currently employs 7,000 people directly in private equity in London and a further 35,000 directly and indirectly within hedge fund management. About 80pc of European hedge funds and 60pc of European private equity funds are located in London, according to the Mayor.

The Alternative Investment Fund Management draft directive was published by the European Commission in April. Mr Johnson has dismissed the plans as protectionist and anti-competitive, and claimed they display ignorance about the workings of the industry.

He has argued that the correct thing to do would be to regulate at the global level through the G20.

JVB with the telegraph

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Finance Jobs in Asia going back to boom time?

HONG KONG — Marco Wong lost his job with Citigroup in Singapore in mid-January. During all the turmoil that engulfed the financial world last year, the cutbacks at the U.S. banking giant were neither unique nor surprising.

Still, Mr. Wong says, Citigroup’s decision not to renew his contract shortly before it was due to end “came as quite a shock.”

But 20 job applications, four interviews and three and a half months later, Mr. Wong was again gainfully employed — as a financial consultant at IPP Financial Advisors in Hong Kong.

Asia has already emerged more forcefully from recession than the United States and Europe, economic reports over the past month have shown. Now, that upturn here is starting — at least tentatively and in certain sectors — to feed into the job market. Hiring is starting to pick up again, recruiters and bankers say.

Broad unemployment is still rising, a normal pattern even after economies begin to emerge from recession. But economists say that any early signs of job growth are a prerequisite for a more solid-based recovery — one in which more confident consumers, and not just huge government stimulus packages, can play a role in lifting the economy.

Perhaps the most striking element in the new hiring: Almost a year after Lehman Brothers folded — roiling financial markets, spurring a remake of the banking landscape and feeding one of the worst recessions in modern history — it is the financial sector that is leading the way.

“The death of the industry has been greatly exaggerated,” said Matthew Hoyle, founder of Matthew Hoyle Financial Markets, a specialist headhunter for the banking and hedge fund industries, based in Hong Kong. “I am actually quite excited about the prospects for the rest of the year.”

“Things have picked up here — unlike in Europe and the U.S., where that’s absolutely not the case,” he added.

To be sure, the recovery in Asia is tenuous, and highly dependent on a recovery in the West, a major market for the region’s export-driven economies. But for now, the picture is brightening.

Jerry Gunnell, a corporate cash management specialist in Singapore, fell victim to Bank of America’s headcount reductions in February. He is now back in the saddle at Standard Chartered, a British bank that does much of its business in Asia, in a somewhat different but equally senior position he took up in mid-June, also in Singapore.

In the past month, several banks have announced plans for some serious hiring in Asia.

Standard Chartered intends to hire about 850 relationship managers for its consumer banking business over the next 18 months, to gain a larger market share of affluent customers in Asia.

HSBC — which, like Standard Chartered, is very active in Asia — is recruiting more than 100 staff members in Hong Kong. In mainland China, it plans to add 1,000 employees this year, and a similar number next year.

Bank of New York Mellon recently announced it would increase its 150-strong Hong Kong staff by another 50 as part of its expansion in Asia.

And ANZ of Australia, which recently bought some Asian operations from Royal Bank of Scotland, the battered British lender, is hiring 100 senior private bankers in the region over the next 18 months.

Several others, including Citigroup, Nomura, Barclays Capital, Credit Suisse and BNP Paribas, have announced new hires and appointments in recent weeks.

Tales like these highlight the newfound dynamism that is starting to creep back into the Asian job market. While unemployment continues to rise in much of Europe and is expected to top 10 percent in the United States before any improvement materializes, rates in Asia have remained relatively low: 5.4 percent in Hong Kong and 3.3. percent in Singapore.

One relatively weak spot is Japan. The jobless rate hit a seasonally adjusted 5.7 percent in July, the highest level since the end of World War II and up from 5.4 percent in June.

But elsewhere, recruitment firms are busy again.

“Last October, after Lehman Brothers collapsed, the lights went out here; it was really quite frightening,” said Nigel Heap, managing director for the recruitment firm Hays in Sydney. “But we’re now cautiously optimistic that the worst is over in places like Hong Kong and Singapore.”

Andrea Williams, managing director of Ambition, a headhunting firm in Hong Kong, said that things started to turn noticeably from April onward.

“During the second quarter of this year, we got in 20 percent more jobs than during the first three months of the year,” Ms. Williams said. “Yes, we’re still below where we were a year earlier, but it’s definitely encouraging.”

A survey in August by Robert Walters, a recruiting firm based in Singapore, showed that job ads in the Hong Kong, Singapore, Chinese and Japanese media nudged up 6.4 percent in the April-to-June quarter from the previous three months.

Of course, for the legions of those who lost their jobs and still remain unemployed, or who are still being laid off as some companies continue to struggle, it is too early to celebrate.

“It’s not an across-the-board improvement — it’s pretty patchy in terms of sectors, and in terms of geographies — but things are at least holding steady or even getting better in some parts,” said Darryl Green, who heads Asia Pacific and Middle East operations for Manpower, a temporary employment and recruiting company.

“On a scale of 1 to 10, I’d say we were negative during the first half of the year,” he said. “Now, we’re at 0.5 or 1 — not huge, but better, and definitely stronger than in the Americas and Europe.”

Nearly all of the jobs that are coming back are “replacements” of previously cut positions, not new jobs, market experts here say. And employers are still being very cautious and choosy when it comes to hiring.

But increasingly, the champagne is coming back out, as Asia’s economies and stock markets are recovering — faster than expected, and faster than Europe and America.

Demand in the financial sector is strongest for back-office positions like compliance and accounting, as well as client relationship and asset management — a business in which many banks want to expand to tap the growing number of increasingly wealthy Asian savers.

Hedge funds, too, are again looking to increase staff, said Mr. Hoyle in Hong Kong. “A lot of the big U.S. hedge funds retrenched — they are regretting it now.”

Outside the financial sector, there is anecdotal evidence of hiring in other areas, though it is patchy.

Demand for sales jobs, for example, has picked up across all sectors as companies focus their still scarce resources on jobs they hope will help generate immediate revenues.

“Asia is seen as a growth market,” said Mark Ellwood of the Robert Walters recruitment agency, in Singapore. “Companies are not going out all guns blazing again, but there is once again an appetite to hire in certain areas.”

In Hong Kong, Eike Croucher, a communications manager, was laid off from Swiss Re after the reinsurance company announced in April that it would shed 10 percent of its 11,500-strong global work force. Mrs. Croucher had a job offer from the German chemicals giant BASF on the evening of her last day at Swiss Re, thanks to some fast networking.

“I was very, very lucky, of course, that things happened so quickly,” she said.

In another example, one senior marketing executive who lost her Singapore-based job with a large U.S. software company, had been in the region for four years. The woman, who spoke on condition of anonymity because she was not authorized to talk to the media, found a job at another U.S. company in the same sector. It took 7 weeks of research, 45 applications and a dozen job interviews.

It is still very much an employers’ market. Generous “expat packages” — in which overseas employees have much of their housing and their kids’ schooling paid for — are for many a thing of the past.

The most successful candidates have experience in Asia, a network of contacts and language skills. It is difficult for someone to just pack up and move over from New York or London, where the market remains much gloomier.

“Employers are still being extra, extra selective in their talent search,” said Mark Carriban, the Asia managing director based in Hong Kong for Hudson, a recruiting agency. “And what is very prized out here is local market knowledge.”

In fact, many recruiters are already starting to warn that a “talent crunch” could be only months away, with companies again struggling to find people with the right combination of international qualifications, contacts and languages — of which there is a limited supply.

One piece of advice for job seekers, though easier said than done: “Learn Mandarin,” Mr. Carriban said.

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Singapore-based hedge fund, Nalanda Capital, is said to be offloading its stake in outsourcing firm WNS Global Services.

From The Economic Times in India, news that a Singapore-based hedge fund, Nalanda Capital is said to be following private equity firm, Warburg Pincus in offloading its stake in outsourcing firm WNS Global Services.

A person familiar with the development told The Economic Times in India that Nalanda Capital has put its 12.3% in WNS on the block. The person requested anonymity as he is not authorised to talk to the media.  This comes a day after ET reported that PE firm Warburg Pincus has held initial talks to offload its 50.12% in WNS for an exit amount of $400 million. The transaction would value the BPO at $800 million.

While Merrill Lynch is believed to be advising Warburg on the stake sale, sources said Nalanda hasn’t appointed a banker but would just go with the seller that Warburg identifies. Since it owns less than a fifth in WNS, Nalanda would have lesser bargaining powers when it comes to price. Sources also said that apart from private equity firms such as Blackstone, Nasdaq-listed IT firm Cognizant is a likely suitor for WNS and will shortly kick off the due diligence process.

Considering that Nalanda Capital picked up a stake in WNS only last year, it wasn’t immediately clear why Nalanda Capital is selling its stake in the firm. “Nalanda Capital is structured like a hedge fund, so it does not have any long-term obligations to stay invested. Also, it will be the right time to exit as they would make a profit,” said an official from the private equity industry, who did not wish to be named.

It is pretty active in the open market and has bought shares in Mastek Global, Carborundrum Universal, Triveni Engineering, Kirloskar Engines Sun TV and Mindtree. Nalanda typically buys shares in multiple lots and tends to pick up 7-8% in any company they invest in.  The hedge fund initially picked up 5.25% in WNS last March and has upped its stake over the last year to become WNS’ third-biggest shareholder with 12.3%. While Warburg Pincus owns 50.44%, the second-biggest is Fidelity Management & Research with 12.37%.

The Economic Times

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Martin Currie Investment Management is reported to be about to launch an Asian marketing office in Singapore

martincurrieFrom the Hedge Funds Club, Edinburgh-based Martin Currie Investment Management is launching an Asian marketing office in Singapore. The firm also plans to add a dealing desk in Singapore in the coming year.
The Hedge Funds Club

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Hedge Funder, Mobster… a wife's misery…

There has been some serious financial meshugas as of late, has there not? In short order, the bond rating agencies, banks, treasury, hedge funds, Federal Reserve and aggressively optimistic (and greedy) homeowners conspired to play Jenga with the house of cards that the American (world) economy was (is) perched upon. But it was really (says this guy) only a few Gordon Geckos that got us to this point. But what about their families?

When it comes time to pay the piper, Bernie Madoff’s family may not get off any easier than the Gottis got (though they may not land a spiky-haired reality TV gig). I read a good book once that said the sins of the father were visited on the son but made no mention of what the wife catches. Presumably, by hook or by crook, she visits whichever hell, heaven or purgatory that the husband earns.

And there is precedent for that in our justice system. It turns out that lots of guys (fraudsters, book-cookers and racketeers, inclusive) confide in their wives. Maybe misery loves company and maybe some shameful burdens are too much to shoulder alone. Whatever the case, Andy Fastow (CFO of Enron) shared enough criminal information with his wife Lea that it cost her a year of her liberty. Technically, she was jailed for failing to report kickbacks on their joint tax returns but it was largely a message move by government.

So, when does spousal immunity kick in? A court case in the 80’s solidified that the right NOT TO testify against a spouse was intrinsic to the 5th Amendment (i.e. you can choose not to testify against yourself or your husband). The right to remain silent, however, doesn’t preclude someone for getting slammed as an accessory (after the fact).

And what about, say, Ponzi-meister Bernie Madoff’s wife Ruth Madoff? There are a few laws enacted to punish people on the receiving end of ill-gotten gains. Whether these gains are fur coats purchased from a Lufthansa Heist or houses in Boca built from pyramid scheme cash, it can all go away quicklike. Some of the time, these laws apply to the unwitting beneficiaries in a Ponzi Scheme or any other rip-off money-maker (see fraudulent conveyance and RICO statutes).

According to the International Herald Tribune a few people are skeptical that she couldn’t have known what was going down. The Madoffs were thick as thieves and these few people don’t think that Mr. Madoff, necessarily, kept his own counsel exclusively. She’s probably on the up and up.
Even Samuel Israel’s gal, Debra Ryan, is caught up in the guilt by association. In addition to helping Israel fake his death, she recently tried to smuggle some cash into the ex-hedge funder, per the New York Times. (And Regina Granato smuggled her mobbed-up husband Kevin Granato’s sperm out of federal custody per Babble.) You may remember Israel as the one who scrawled the theme song from MASH, “Suicide Is Painless,” on his truck overlooking a precipice to avoid jail time.

What’s the moral of the story? Is it, ask lots of questions? Is it, don’t ask any questions? Or is it, don’t marry hedge fund guys or mobsters?

Any first hand experience out there with catching heat for a husband living ‘neath the law?

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