Carl Huttenlocher’s eagerly anticipated hedge fund launch in Hong Kong has been delayed because of a regu
Carl Huttenlocher’s eagerly anticipated hedge fund launch in Hong Kong has been delayed because of a regulatory review by the city’s regulator, the Securities and Futures Commission, reported the Wall Street Journal this week. Sources familiar with the SFC’s inquiries said that regulators want to know about specific convertible bonds held by the Highbridge Asia Opportunities fund, a hedge fund owned by J.P. Morgan and which forms a small part of the main New York-based multi-strategy hedge fund. Specifically, the SFC are believed to be interested in how Huttenlocher’s team marked the fund’s assets at various times, including times of redemption. The SFC’s request for information comes on the back of an anonymous complaint filed over the summer. Huttenlocher was hoping to launch his new Hong Kong hedge fund, Myriad Asset Management, on 1 September.
One issue under review, wrote the Wall Street Journal, was whether the Asia Opportunities fund valuations, the timing of its asset sales and payouts to withdrawing investors unfairly benefited ongoing investors, increasing their returns and fees to the fund’s managers while hurting the clients that were redeeming. Huttenlocher has moved quickly to clear up the situation, understandably wishing to avoid any controversy at a key time. He released a written statement, saying: “In the three years I met with investors since 2008, I didn’t hear any complaints about the Asia Fund’s valuation or gating practices, and in fact, most investors applauded the plan. There is no factual basis to this anonymous complaint.
