Singapore Hedge Fund

Alternative asset management in Singapore

Tribridge To Launch New pan-Asia Hedge Fund

Tribridge Investment Partners Ltd., a Hong Kong-based hedge fund manager, said Monday it will launch a new fund in August and hired John Liptak, former head of Bank of America Corp’s Asia special situations group, to run it.

The new fund will have a pan-Asia focus and seek to identify mispriced or undervalued securities due to financial stress, some corporate event or other special situation. It will be biased toward large-cap companies in more developed markets in the region such as Hong Kong, Australia, Korea, Singapore, or Japan.

“I believe that the opportunities from the upcoming default cycle have not been seen since shortly after the Asian currency crisis back in 1997-1998,” Liptak said in prepared remarks.
Citigroup. is the fund’s prime broker and Bank of New York Mellon Corp. is the administrator. Tribridge, founded in 2003, has US$259 million in assets under management in four different funds including a Korea multi-asset fund and three credit funds.

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Yet another Hedge Fund starts in Singapore: GCS Capital Management

At that point, it is more than a trend…

Stephen Satchell, the former Tokyo- based head of Asian proprietary credit trading at Credit Suisse Group AG, plans to start an Asia-focused credit hedge fund as early as this month.

The GCS Asian Opportunity Fund I will offer “small-to- medium sized” loans, mostly with an equity component, to companies in the region, said Satchell, 40, who set up Singapore-based GCS Capital Management. The fund could grow to $500 million to $750 million and will target annual gross returns of about 25 percent, he said in an interview on July 10.

GCS Capital is seeking to take advantage of trading opportunities in credit markets as banks and hedge funds sell assets at a discount to repair balance sheets or exit the region. Banks and brokerages worldwide have tightened lending and scaled back trading to conserve capital after reporting almost $1.5 trillion of losses and writedowns since the U.S. subprime mortgage market collapsed, data compiled by Bloomberg show.

“The goal of the fund is to be fairly nimble and opportunistic to focus on transactions that we think are mispriced,” Satchell said in a telephone interview from Tokyo, where he is currently based. “The secondary transactions will come from the investment banks and hedge funds that were involved in that business two or three years ago and are no longer involved.”

He said he plans to move to Singapore, where most of the firm’s transactions will be “originated and worked on.” The fund will initially invest in companies in Japan, China, Indonesia and India, he said.

Second Fund

Satchell, who will start trading with his own capital, said he is in talks with “two large institutional investors” who will likely put money into his fund. He declined to name the institutions.

GCS Capital also plans a second fund with a “longer-term lockup” that will invest in “more illiquid type of credit” such as commercial mortgage-backed securities and private loan transactions, he said.

“There are a lot of assets out there trading at economic levels for a variety of reasons usually not related to the actual underlying fundamentals of the borrower,” Satchell said. “We’re going to look at a variety of things on an opportunistic basis.”

While raising capital has been “hard,” Satchell said he is “fairly optimistic” that money will flow back to the hedge- fund industry.

Sidelined Money

“There is a lot of money on the sidelines, in institutions which just can’t sit there for too long,” he said. “Wealthy individual investors can always pull out in theory because they don’t mind keeping their money at zero; institutions, whether insurance companies or pensions funds, need to make money and zero doesn’t quite cut it.”

Hedge funds, beset by investor withdrawals in 2008, had net inflows for the second consecutive month in June, when they attracted $4 billion, according to Singapore-based data provider Eurekahedge Pte.

Satchell was the head of Asian credit trading at Commerzbank Securities in Tokyo from 2001 to 2003. He previously ran the Asian structured products group for four years at ING Barings and was based in the Japanese capital and Hong Kong.

With Bloomberg

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Darwin Japan Hedge Fund Returns 31% Since January on Small Caps

Darwin Capital Premier LS1 Fund, a hedge fund investing in Japanese stocks, has returned 31 percent since opening to investors in January as bets on companies including JP-Holdings Inc. and Daiken Medical Co. paid off.

The fund, advised by DarWin Capital Partners Ltd., began on Jan. 20 after running under a limited partnership structure since June 2006, according to Takafumi Sahoda, founding president of Darwin Capital in Tokyo. Prior to the January start, the strategy returned 224 percent in the 27 months through October 2008 compared with a 54 percent slide in the benchmark Nikkei 225 Stock Average in the same period, he said.

Sahoda wants to grow the fund’s assets under management to 3 billion yen ($31 million) by the end of 2010 from the current 400 million yen. The fund invests in Japanese listed companies with a market value of up to 100 billion yen using a long-short strategy that bets on rising and falling prices.

“What I’ve learnt over the years is that doing the legwork to find good investments bears fruit,” said Sahoda, 33, who formerly worked at Daiwa SB Investments Ltd. and Nissay Asset Management Corp. “When it comes to investing in small-to-medium cap stocks, it’s very important that you find ways to exit given the limited liquidity.”

Sahoda set up the firm in April 2006 in the wake of the so- called “Livedoor shock,” when executives at Internet provider Livedoor Co. were arrested for fabricating profits, sparking concerns about the finances of second-tier companies.

That contributed to a 34 percent slide in the Japanese small-cap market that year as measured by the Jasdaq Stock Index, a benchmark for Japan’s smaller companies.

JP, Daiken Medical

The fund has invested in Nagoya prefecture-based JP- Holdings, which operates daycare centers in Japan, and is expected to benefit from government subsidies for working parents, Sahoda said. JP-Holdings has gained 96 percent this year, compared with the 0.2 percent decline by the Jasdaq index.

Daiken Medical, an Osaka-based medical equipment maker, has also contributed to the fund’s gain since going public in March. The company, which owns patents for medical devices, has risen 71 percent since its initial offering price.

Managers of Japanese long-short funds have returned 5.5 percent this year through June, compared with a 9.4 percent gain by global hedge funds, according to data by Eurekahedge Pte. Darwin’s Premier LS1 fund has returned 20 percent through July 8 since inception after fees.

Investors of the fund, managed by United Investments Co., currently consist of high net-worth individuals in Japan, according to Sahoda. He aims to attract new investors such as pension funds and fund of funds in Japan and abroad.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.

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Nomura plans global prime broking business to serve Hedge Fund

Japan’s Nomura Holdings  plans to launch a global prime brokerage business by September as the financial crisis has created room for new players to serve hedge funds, a senior executive said on Monday.

“We think prime brokerage is a very interesting opportunity because of what happened in the industry this past year,” Siggi Thorkelsson, Nomura’s head of equities Asia-Pacific, told Reuters in an interview.

Prime brokerages offer services such as clearing, securities lending and financing for assets to hedge funds. Banks such as Goldman Sachs  and Morgan Stanley have historically dominated the business.

Thorkelsson said Nomura historically has not been present in the prime broking space.

“It used to the case that the barriers to entry were very high as there were a couple of firms that dominated the market. Now those firms have lost a lot of the market share and there’s market share to be gained there,” he said.

The hedge fund industry suffered record redemptions last year, fuelled by weak performance exacerbated by a meltdown in financial markets last fall.

“The tide seems to have turned there. There are have been a number of firms that have done extremely well and those hedge funds will be the biggest beneficiaries of a less crowded market place in the coming years,” Thorkelsson said.

Nomura, which took over the European, Middle Eastern and Asian units of bankrupt Lehman Brothers, is also looking to increase its market share in Asia in electronic trading, derivatives and convertible securities.

“Our ambition for Asia is to be in the top three to five in terms market share and we are not there yet,” Thorkelsson said, adding the firm is in the top 10.

Currently Asia excluding Japan accounts for 30 percent of its Asia-Pacific equities business and the firm plans to grow that share to 50 percent in one and half years, he said. He did not provide figures.

“Most important markets for us in the medium-to-long term are China and India and in the immediate term, Hong Kong and Singapore are the main areas of focus.”

With Reuters

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