Hans Schlaikier, Hedgeweek

Goldman Sachs and ex-Mirae CIO to launch fund… Six funds get the green light in China…

Thu, 19/09/2013 - 22:50

Goldman Sachs Investment Partners and Cong Li, the former chief investment officer of Mirae Asset Global Investment (Hong Kong), are preparing to start separate Asian hedge funds as fund launches gather pace in the second half of the year in the region.

As reported by Reuters, Goldman is raising money for Oryza Capital, an Asia-focused long/short equities hedge fund it set up this month, according to a document seen by Reuters. The fund has initial capital of USD80 million, the document showed.
 
Oryza's 14-member team is led by Goldman partners Hideki Kinuhata in Tokyo and Hong Kong-based Ryan Thall who will focus on mid and large-cap stocks, the document showed.
A Goldman Sachs spokeswoman declined to comment.
 
In a separate development, Cong Li is setting up Zenas Capital Management in Hong Kong and will invest in Greater China stocks, a hot performing region for hedge funds this year. Li left Mirae in July where he managed more than USD9 billion.
 
He told Reuters that he will launch the fund in mid-October and expects to raise more than USD100 million in the next year.
 
Li is among the first generation of Chinese fund managers, dating back to 1998 when China's mutual fund industry started. He moved to Mirae Asset in 2006 from Hamon Investment Group in Hong Kong. Before that, he worked at Hua An Fund Management Company in Shanghai between 1998 and 2003.
 
Jason Jin, a junior portfolio manager and investment analyst at Mirae Asset, has also joined Li.
 
The MSCI China share index fell 7.6 per cent through August of this year. Yet hedge funds investing in China shares gave an average return of 8.8 per cent during the period, according to data from industry tracker Eurekahedge, raising hopes for capital inflows into such funds.
 
Young manager specialist, IMQ, today announces that USD33m of acceleration capital has been allocated to Asian volatility arbitrage expert, True Partner Fund. The investment takes the manager to an AuM of USD107m.

Located in Hong Kong, the team run by Ralph van Put applies a sophisticated approach to volatility trading, combining broad options expertise, global trading experience, and advanced technology. While the focus rests on trading opportunities within the Asian markets, the team runs a global book.

The investment strategy can be characterised as medium frequency, market neutral trading and continuous hedging of volatility spread positions in listed options, predominantly in the equity index space. Emphasis is placed in pro-actively managing portfolio risks, through both static and scenario based risk analyses.

True Partner's Van Put comments: "We are pleased with the cooperation with IMQ as it highlights our momentum in asset gathering, with IMQ providing an opportune bridgehead towards institutional investors".

IMQ’s CEO and Founder, Jeroen Tielman, comments: "We like the True Partner strategy as it has a strong track record of two years and it has a very low correlation to both hedge funds and conventional asset classes. The thought and dedication put in by the key principals, to create and evolve the business together over a decade, was evident from our first meeting with them.”

Tielman goes on to say: “This is a good example of IMQ's expansion into the acceleration space of emerging managers. Knowing that a team and strategy have been test-driven provides an additional level of comfort in evaluating a young manager; True Partner being prime example of this. Our commitment brings total AUM of True Partner beyond the crucial USD100m mark.” 
 
The Man Group has confirmed that it is one of six hedge funds to receive the green light to operate in China.
 
In the next few months, the Man Group, a London-based hedge fund, will be able to raise USD50 million from institutions in China to invest around the world, as part of a pilot program in China’s financial city of Shanghai.
 
It is one of a series of small steps that Chinese officials have taken in recent months to dismantle the barriers that separate their country from global markets. Wall Street and other financial hubs had been watching for these changes for years.
 
“It’s quite exciting, actually,” said Pierre Lagrange, chairman of Man Group Asia and co-founder of GLG Partners, who oversees the hedge fund’s long- and short-equity strategy.
“I think everyone and their mother wanted to get in, and we’re very happy and proud to have been selected,” Lagrange said. The fund has been working to get approval in China for several years, he said.
 
Regulators have also granted Oaktree, Och-Ziff, Citadel and Canyon Partners, all based in the United States, and the British firm Winton Capital permission under a test program called the Qualified Domestic Limited Partner program, according to people familiar with the program. Each fund is expected to be allocated a quota of USD50 million on a trial basis, totaling USD300 million, these people said. The Man Group was the only one of the six to confirm that it had been chosen by the Chinese authorities.
 
The news of the trial program was first reported by the 21st Century Business Herald, a Chinese newspaper. The hedge funds requested to be able to raise more than the initial USD50 million but Shanghai’s regulators are still testing the waters, according to the report.
 
China’s new leadership is fighting within itself over how to carry out the reforms necessary to open up its financial borders. Its top leaders have been pushing to speed up the changes, according to a person involved in the government program who would not speak on the record because of a nondisclosure agreement.
 
As part of the move, Shanghai is expected announce a free-trade zone in the coming months, which would open the door for other financial services firms eager to tap what is expected to be the biggest source of wealth for decades to come.


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