Hans Schlaikier, Hedgeweek

Goldman Sachs launches Asia fund… Hedge fund to back Chinese takeover of Smithfield foods…

The Goldman Sachs Group, Inc’s multi-disciplinary hedge fund unit – Goldman Sachs Investment Partners – has launched a new hedge fund in Asia named Oryza Capital. Goldman Sachs is at present raising capital for the fund. Through this new fund, the bank primarily seeks to tap rising opportunities in the emerging markets of Asia.

Oryza Capital came into being earlier this month, and is a long/short equity fund, which invests in Asia – including Japan – as well as Australia. The fund is managed by Goldman Sachs Investment Partners' Asia co-heads, Hideki Kinuhata and Ryan Thall.

Asia’s economic growth has outperformed both the U.S. and Europe in the recent past.  Further, according to Chicago-based data provider Hedge Fund Research Inc., inflows into Asia-based funds have taken regional hedge-fund assets to the highest level since 2007. These factors played a significant role in attracting global investors like Goldman Sachs.


Starboard Value said on Friday it was giving up its attempt to block the sale of US pork giant Smithfield foods to China's Shuanghui, making approval of the USUSD7.1 billion takeover likely.
 
The hedge fund said in a filing with the Securities and Exchange Commission that it was not able to bring together an alternative bid in time before the September 24 Smithfield shareholder vote on the deal.
 
That opens the door for what will be the largest ever Chinese takeover of a US firm, an iconic US company called the world's largest pig farmer and pork processor.
 
For Shuanghui International, a large Chinese meat processor, it locks in a strong supply of pork products to deliver to the huge, undersupplied Chinese market.
 
Starboard had argued that Smithfield is worth USD9-10.8 billion if broken up, much higher than what Shuanghui had offered: a USUSD4.5 billion in cash, USUSD34 a share deal that, including Smithfield debt, comes to a USUSD7.1 billion value.
 
Given the time for the vote and restrictions on how an alternative bid could be made, Starboard said, "it proved challenging for the bidder group to formalise and deliver an alternative proposal prior to the special meeting scheduled for September 24."
 
Starboard said it was confident that given time it could have assembled a group of buyers that would offer more than the proposed by Shuanghui, but not before the shareholder vote.
 
Louis Curran, head of institutional foreign exchange sales for Asia at UBS in Singapore, left the bank earlier this month after just over a year.
 
Curran joined UBS in May 2012, reporting locally to Lutfey Siddiqi, head of fixed-income, currencies and commodities corporate coverage and FX distribution for Asia-Pacific, and initially shared responsibility for Asian institutional FX sales with Dino Spinelli.
 
In December 2012, Curran took sole responsibility of the business, excluding Australia, New Zealand and Japan. In addition to overseeing the delivery of the Swiss bank's FX products to leveraged and real-money clients in Asia, he also covered sales to central bank and sovereign wealth clients. His replacement has not yet been decided upon.
 
Before joining UBS, Curran was co-head of hedge fund FX sales for Europe, the Middle East and Africa at Nomura in London between 2009 and 2012. He has also worked previously at Citi and Merrill Lynch.
 
The yen weakened for the first time in five days against the dollar as speculation Japan’s government will cut corporate taxes spurred stock gains and damped demand for the relative safety of the currency.

 
Japan’s currency dropped against all of its 16 major counterparts as shares rallied on bets the tax cut will make companies more profitable. New Zealand’s dollar strengthened amid speculation the country’s central bank will be the first among developed nations to raise interest rates. The pound weakened against the dollar after a government report showed annual economic growth was less than earlier estimated.
 
The yen dropped 0.5 per cent to 98.95 per dollar as of 9:10 a.m. New York time, after reaching 100.61 on Sept. 11, the weakest since July 22. Japan’s currency lost 0.3 per cent to 133.59 per euro. The dollar strengthened 0.2 per cent to USD1.3501 per euro.
 
The Brazilian real has gained 7.6 per cent versus the greenback this month, while the yen has declined 0.8 per cent.
 
This quarter, New Zealand’s dollar has led all major gainers with a 7.1 per cent increase, while the worst-performing South African rand has slipped 0.9 per cent. Denmark’s krone is the best-performing currency in 2013 and the rand has plunged 15.1 per cent.
 
The New Zealand dollar snapped a two-day decline against the greenback as Asian stocks advanced, underpinning demand for higher-yielding currencies. The currency rose 0.5 per cent to 82.82 U.S. cents after dropping to 82.17 cents yesterday, the lowest level since Sept. 18.
 
Indonesia’s rupiah gained as Finance Minister Chatib Basri said the country plans to boost its currency-swap arrangements to almost USD40 billion by signing deals with China and South Korea. The rupiah increased 0.2 per cent to 11,460 per dollar after earlier climbing 0.4 per cent, the most in a week.

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