Hans Schlaikier, Hedgeweek

Japan leads strong global hedge fund performance… former FrontPoint specialist to launch Asian hedge fund…

The Eurekahedge Japan Hedge Fund Index crossed the 200-point mark for the first time to reach its highest level on record, according to the index provider.

Japanese hedge funds have also experienced their strongest three-month return on record, with a total performance of 10.5 per cent.

"The promise of Prime Minister Abe's policies have delivered strong gains to the Japanese market and the momentum looks set to continue for awhile. Certainly Mr. Abe seems convinced of this as he reflected at the CSIS forum that "Japan is back" and the market is following the flow. The Eurekahedge Japan Hedge Fund Index has climbed to its historical high, crossing the 200 point marking and gained 10.50 per cent over the last three months; making it the strongest 3-months on record for the index," Eurekahedge said.

Indices for Asia ex-Japan, Europe, North America and Latin America also showed positive performances, although Eastern European hedge funds ended the month with losses, the data suggests.

In terms of strategies it was event driven hedge funds that posted the strongest returns. CTA/managed futures posted the lowest returns, down 1.23 per cent on currency and commodity price movements, according to Eurekahedge.

Thomas Monaco formerly of FrontPoint Partners is readying a hedge fund to invest in the sector in Asia.

The financials specialist has now founded Nighthawk Capital and has begun looking for investors for its first fund. Nighthawk will employ a long/short strategy focused on Asian financial stocks, Bloomberg News reports. Nighthawk will be one of a few industry specific hedge funds outside of telecommunications, a sign that the market for financial stocks in the region has become deep enough for hedge funds to ply.

At FrontPoint, Monaco co-managed the firm's Financial Services Fund alongside star manager Steven Eisman. He left the firm in 2011, after it shut most of its funds, including his and Eisman's. FrontPoint closed last year.

Monaco, who worked at FrontPoint from 2007 through 2011, moved to Mizuho Securities Asia in Hong Kong, leaving that post in January.

According to a Bloomberg News report Ivaldi Capital LLP is backing two Asian hedge funds that will start trading in the first half of 2013, as revealed by Chief Executive Officer William Potts.

The Bloomberg report says that while Potts declined to name the hedge funds, he revealed in an e-mail that they include a market-neutral long-short equity strategy that trades with computer models and a stock fund that focuses on the region’s telecommunications industry. Potts added that Ivaldi Capital is waiting for the Monetary Authority of Singapore’s approval to start trading.

Small hedge funds have struggled to raise money and managers are under increasing pressure to meet investors’ short- term return expectations, said Potts. Investors willing to consider giving capital to new hedge funds whose managers had at least than three years’ track record at other hedge funds, and doing so without demanding fee discounts, dropped by 23 percentage points since 2010 to 38 percent this year, according to a Credit Suisse Group AG survey this month.

“It is proven early-stage or second-generation managers outperform over time,” said Potts. “With the lack of seed capital, closure of proprietary desks and, in Asia specifically, a seeming reduction of funds’ presence, we have an enormous opportunity.”

An estimated 263 Asian hedge funds opened in the two years to December, while there were 33 liquidations, according to data from Eurekahedge Pte.

Mesirow Financial has hired FRM Investment Advisory's South Korea chief to help build its business in North Asia.

Chae-Joo Lee has been named head of Korea. Based in Hong Kong Lee will focus on client services and business development in North Asia for Mesirow Advanced Strategies, Chicago-based Mesirow's fund of hedge funds business.

"We take great pride in being a reliable partner for our clients, helping them design and implement strategic hedge fund programs," MAS CEO Marty Kaplan said. "South Korea is a sophisticated and growing marketplace for alternative investments. I am excited to bring our hedge fund solutions to this important part of the Asian market."

Lee most recently served as CEO and head of Korea at FRM Investment Advisory, based in Seoul.

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