Hans Schlaikier, Hedgeweek

Montello Income Fund approved for distribution by MAS… SAC Capital Hong Kong lose staff and SAC Capital’s Asian based manager to start Macro Fund…

Montello Income Fund is now approved for Distribution with the Monetary Authority of Singapore. 

Montello have received approval from the Monetary Authority of Singapore for the distribution of the Montello Income Fund. The Fund has been accepted by the Singaporean Authority and is now listed as a permissible collective investment scheme that can be sold in the country.

Montello have recently been expanding the distribution of the Montello Income Fund in Asia. Managing Director of Montello, Christian Faes, explains “We have found that the Fund is quite popular to offshore investors, particularly in Asia. We have a good stable of IFAs that support the fund from Hong Kong, and we can now expand that distribution on to Singapore.” 

The Montello Income Fund provides investors with a fixed return of 8.5 per cent per annum, and is largely recognised as the leading real estate mortgage fund in the UK. The Fund is focused on short-term lending against the London residential property market. All of the Fund's loans are secured by registered first charges.

Managing Director of Montello, Christian Faes, commented: “We have had a number of very positive developments for the Montello Income Fund lately. We are finding that the Fund is particularly popular with investors that are looking for yield, and we believe that the fund provides a superior risk adjusted return”.

Singapore-based hedge fund consultant and manager GFIA noted a significant spike in the number of Asian hedge funds with less than USD10m in assets under management due to investor withdrawals and fund poor performance.

In terms of performance, the Eurekahedge Asian Hedge Fund Index finished 2011 down almost 8 per cent and 2012 up almost 10 per cent (it is currently up 5.5 per cent YTD to end-March 2013). 2012 saw a decrease in number of funds that were larger than USD10m, except for the billion-dollar fund category which saw an increase of one fund.

The data clearly indicates that only around 28 per cent of the industry is getting the attention of professional allocators. The recent market turmoil and the resulting capital withdrawals have clearly made it an extremely difficult year for Asian hedge funds to gather assets, although
Hong Kong is still the home for most investment decision offices running Asian hedge funds.

Overall, GFIA believes that continued asset growth of the Asian hedge fund industry will be driven by large indigenous managers, or the locally established desks of global firms, as size does matter in this game of survival.
As of December 2012, the total AUM of the industry was an estimated USD135bn, compared with USD147bn at end-2011. But the consultant believes that with signs of recovery in the U.S., less uncertainty in Europe, and better sentiment in Japan in late 2012, there may be more demand for risk assets this year.

However, it remains to be seen whether the Asian hedge fund industry is recovering structurally. Allocations are still concentrated on a few names. But GFIA is certainly seeing more interest in investment talent in Asia from international investors, in particular from the USA, which should increase allocations overall.

Toru Ueda, co-founder of hedge-fund firm Hachiman Capital Management, sued his former partner Yashwant Bajaj, claiming he was shortchanged after the two decided to shut the company.

Bajaj transferred USD458,965 from Hachiman to his Juggernaut Capital Management Pte without Ueda’s consent, according to Ueda’s lawsuit filed at the Singapore High Court last month. Bajaj also incurred a trading loss of USD247,197, which wasn’t accounted for, Ueda said in his complaint.

The two men had an agreement preventing them from withdrawing more than their stakes in the company that they founded in 2004, according to the complaint. The duo decided to part ways in September 2010 and agreed that from March 29, 2011 each would be responsible for any losses from their individual investments and not the company, Ueda said in the lawsuit.

“The claims against me are wholly without basis,” Bajaj, who hasn’t filed his defense, said in court papers. A closed hearing was scheduled for April 17th.

Seven Hong Kong SAC Capital staff left the firm while five others relocated to New York and London amidst ongoing insider trading probe against the giant hedge fund firm
, according to an industry news source.

Citing insider sources and regulatory filings before the Securities and Exchange Commission (SEC), the report said the departures come at a very challenging time for SAC Capital which has been struggling with USD1.7bn redemption requests from investors that could downsize its USD15bn hedge fund firm just as it is trying to gain a foothold in the Asian region.

This year, SAC hired three people for its Hong Kong Office and is also planning to set up shop in Japan.

Those who left the SAC office in Hong Kong were Aaron Nieman, Frank Ho, Jinchul Lee, William Montgomery, Steven Su, Miaodan Wu and Xiaojing Zhang. Jay Luo, SAC's head in Asia, left the firm last year.

Yip Ka-hay, the first Asia-based manager hired by Steven Cohen’s USD15 billion SAC Capital Advisors LP, plans to start a macro hedge fund in July to trade currencies
, interest-rate securities and equity indexes in the region.

Yip, the founder of Hong Kong-based Bright Stream Capital Management Ltd., will start trading with as much as USD25 million of his own money, he said in an interview April 12. He expects additional capital from investors will take Bright Stream Macro Fund’s size to as much as USD300 million within 18 months.

The 42-year-old is rejoining the hedge-fund industry after a four-year gap to take advantage of a shortage of Asia-focused funds that bet on macroeconomic trends. Expectation for rising interest rates and repricing of other currencies against the dollar will make the strategy more profitable in the coming years, he said. 

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