Hans Schlaikier, Hedgeweek

Ascalon Capital Managers appoint new Australia head… GFIA discusses Japanese hedge funds…

Robert Lance has joined Ascalon Capital Managers as Head of Ascalon in Australia with responsibility to lead and manage its Australian operations.   

Mr Lance’s primary responsibility will be to lead the relationships with Ascalon’s boutique partners in Australia. Most recently Mr Lance was the co-founder and CEO of DragonBack Capital based in Hong Kong.
 
Ascalon Capital Managers chief executive, Chuak Chan, said Mr Lance has more than 25 years in Asia Pacific financial markets building and leading investment banking and asset management teams. “He is a strong and dynamic addition to our team at a time when Ascalon continues to grow.”
 
Last month, Ascalon announced it had acquired a 30% stake in Singapore-based alternative manager, RV Capital. Mr Lance will be based in Sydney and will report to Mr Chan.

 
Ascalon Capital Manager take equity stakes in and partners some of Asia Pacific’s leading boutique asset managers who specialize in high conviction or absolute return strategies. 
 
A recent article in Hong Kong’s South China Morning Post reported that foreign hedge funds are going to be allowed to raise Yuan capital from mainland China investors which can then be invested in overseas securities.
 
The article explained that the QDLP scheme, designed for foreign hedge funds, complements the qualified foreign limited partner system Shanghai launched in 2011. "Shanghai has started the countdown to the introduction of a "qualified domestic limited partner" (QDLP) scheme, which will allow foreign hedge funds to raise Yuan capital on the mainland to make investments in overseas securities".
 
The city has submitted an application to the country's foreign exchange regulator for a USD5bn quota, which may then be distributed to funds wishing to participate in the scheme.
 
An official with the Pudong Financial Services Bureau said in the SCMP piece: "The QDLP programme will be launched sooner rather than later. The city officials are very active in pushing ahead with major liberalisation, including the QDLP."
 
Under the QDLP scheme, qualifying foreign hedge funds must be registered with the local authorities before they can convert Yuan funds that they will be allowed to raise from mainland high net worth individuals into foreign currencies for securities investments abroad.
 
The scheme, initially proposed by the Shanghai government, is intended to bolster the growth of the domestic hedge fund sector.
 
The QDLP scheme, designed for foreign hedge funds, complements the qualified foreign limited partner system Shanghai launched in 2011.
 
Sources said Shanghai might now get a USD3bn initial quota for the QDLP scheme, rather than the USD5bn it had bid for in its discussions with the State Administration of Foreign Exchange.
 
Hedge fund advisory firm GFIA addresses the subject of the resurgence in hedge funds in Japan in this month's issue of their research insights, asking is the recovery rational, or a false signal?
 
"Compared with when we last visited the topic two years ago, Japan seems to have regained investors' attention; it might even become a pain trade, too important to omit in the context of a global portfolio. Bloomberg reports that "the rally in Japanese stocks since new Prime Minister Shinzo Abe... is starting to stir investor interest in hedge funds", and it certainly doesn't discourage that Eurekahedge has just reported the best three month performance on record for their Japanese hedge fund index through February."
 
In their quantitative research piece, GFIA looked at the Japan absolute return universe, and quantified some of the characteristics of the constituent funds over the years. "We note however a precipitate drop in the number of listed funds since our last Japan-focused study; our final universe consists of 96 funds, less than half the number listed in May 2011.
 
"Nobody knows whether ‘this time it's for real’ in Japan. While the renewed enthusiasm is certainly good for business, it may not necessarily be self-fulfilling or sustained. Half the deflationary battle (a psychological disease entails a similar cure) may already be won, if market sentiment continues to buoy domestic spending." "But from an allocators' perspective, this is a market representing the world's third largest economy; arguably its most innovative economy, with over 3,000 listed stocks, of which, conservatively, there might be sell-side coverage of 25 per cent, and a minimal community of alpha seeking investors. Ignore Japanese alpha at your peril."

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