Global solutions provider Linedata announced this week that two hedge funds in Asia have selected Linedata Global Hedge to support their businesses. One of these, Magenta Advisors PTE Ltd (Magenta), an independent boutique asset management and investment advisory firm based in Singapore, selected the portfolio management and middle office module of Linedata Global Hedge to support its start-up hedge fund business.
Recent analysis of the hedge fund industry in Asia shows strong performance that is reflected in a record number of 1,128 hedge funds in the third quarter of 2012. As competition intensifies amidst volatile market conditions, it is increasingly important for hedge funds to have robust, trusted systems in place to support complex requirements, deliver transparency and control, and ultimately help attract investors.
May Lim, COO and Executive Director at Magenta, commented, “Linedata offers us both the functionality and scalable technology that we require to support our business. As a start-up, it is crucial for us to have control of our costs without sacrificing the integrity of the firm. We chose Linedata’s hosted solution as it gives us peace of mind regarding the system and data availability, it takes away the need for us to perform costly data backups and allows us to make the most effective use of our time by focusing on our core business. Looking forward, the ease of adding new funds and structures to the system means that we can launch a new product offering to our investors quickly and without incurring hefty implementation costs.”
Triskele Capital Management has decided to close its two hedge funds after investment losses and investor redemptions, said Chief Investment Officer Tsuyoshi Shiba.
Triskele which is based in Hong Kong and ran more than $600 million in assets at its peak, recently notified investors of the decision after assets shrank to about $132 million, according to Shiba. The Triskele China Fund, which invests in equities, lost about 9 percent last year, It has not been decided whether the management company will be closed down, Shiba said. Triskele also decided to close the about $12 million Triskele CB Fund, even as it generated positive return, because of its small size, he added.
Politically influenced markets have made it more challenging for fundamental stock-pickers, prompting investors to cut equity holdings in favor of the fixed-income market, forcing some Asian managers to shut hedge funds. About 860 hedge funds closed globally last year, the highest since the 2008 financial crisis, according to Singapore-based data provider Eurekahedge Pte.
The Triskele China Fund, which started trading in late May 2007, mainly invests in companies with growth potential in Hong Kong China and Taiwan according to a May 2011 marketing document. The fund lost 10.5 percent in the first 11 months of last year and the fund’s assets declined 73 percent from the late July 2011 peak of $606 million to $164 million by November, according to data compiled by Bloomberg
The Triskele CB Fund, which invests in convertible securities sold by companies in Asia outside of Japan, returned 4 percent in the first 10 months last year, according to Bloomberg data.
Quest Management president and founder Doug Barnett is bullish that 2013 will be a strong year for Asian markets and even better for Quest’s Asia ex-Japan hedge fund: Greyhound Asia Fund, managed by Sergej Belozerov.
In a letter, Barnett said Greyhound achieved positive performance last year while holding mostly cash during the critical European uncertainties during the late spring. He added that 2012 was a very challenging year for the markets because of uncertainties from the U.S., EU and China. The fund posted positive gains of 6.9% in 2012 compared with the MSCI Asia ex-Japan index, which gained 19.4% last year.
Since the beginning of the fund’s track record in August 2010, Greyhound is now up 27.4% while the MSCI Asia ex-Japan Index is up 12.0% and the average Asian hedge fund (Eurekahedge Asian Index) is up 10.2%.
Quest believes that markets have survived the critical period of uncertainty in the US, Europe and China. According to Barnett, the U.S. is showing signs of life after successfully negotiating the fiscal cliff. Also, European risk has diminished with the European Central Bank’s announcement of its unlimited bond purchase program. Thirdly, he added, the Chinese economy has found its bottom and is now turning after two and a half years of slowing growth.
He continued, "But most importantly, we are very excited about our portfolio companies’ prospects, and we are fully invested. We believe it is now a good time to invest in our Greyhound Asia Fund. China’s leadership transformation is finally behind us. The first positive comments from the new leaders, coupled with an improving economy, should produce a new bull market. Valuations are still at historic lows, with sentiment still gloomy and most investors underweighting China."
