Daryl Flint’s Double Haven Capital Management (Hong Kong) Limited this week announced the acquisition of hedge fund platform, DragonBack Capital Limited. The hedge fund had previously been using the platform to outsource its risk management and other back office functions.
Consequently, these functions will now be managed in-house with the same team joining Double Haven. Flint, CEO and CIO of Double Haven, will continue to focus on Asia credit strategies with his team, and with good reason. Through September 2012 the Double Haven Asia Absolute Bond Fund has returned 16.8 per cent. Even though Asia’s credit markets have developed significantly over the last decade, Flint believes there is still plenty more to be done.
“In 2012, we are witnessing an unprecedented amount of new issuance which has been easily absorbed by the market, as global bond investors shift from being underweight this asset class.” Added Flint: “We think this asset class offers a tremendous opportunity, and are excited to be in a stronger position to deliver a fully institutional offering to investors.” Double Haven currently runs approximately USD200million in AUM.
Splendid by name, splendid by nature. At least that’s how it appears for former Credit Suisse trader Charlie Chan’s Splendid Asia macro hedge fund. As Reuters reported this week, the fund is up a phenomenal 60 per cent this year thanks to a series of savvy positions in real estate investment trusts (REIT), bonds and currencies. At the zenith of Chan’s career at the Swiss bank he headed a team running portfolios of over USD10billion. In that regard his USD80million fund – of which around half of the fund’s money is his own – is small beer by comparison. But who’s complaining with returns that are tenfold that of the average hedge fund this year.
At a time when Asian hedge funds are struggling to build momentum, Chan’s fund is a shining beacon of light. Since inception in August 2011 the fund’s assets have more than doubled, having launched with USD37million. Chan was quoted as saying: “We took risk when nobody else wanted to. REIT was a big major long and the regional equities. We have not sold anything at a loss.” Cambridge Industrial Trust was one major winner reported Reuters, the Singapore-based REIT having grown 40 per cent this year.
Chan has also made money going long currencies such as the Singapore dollar and trading the Indonesian rupiah. Despite the fund’s stellar success Chan is in no rush to go out and actively market the fund to prospective investors: “They know where to find me. I think money will come.”
Taking a rather dramatic deviation, readers might be interested to hear about a new film which kicked off its official Asia premiere this week to a packed audience in Hong Kong. Entitled “$upercapitalist”, it is being billed as the first English language financial thriller to be produced in the city, reported Channel News Asia. The story focuses on a New York hedge fund trader, Conner Lee, who moves to Hong Kong to close a mega-deal that goes horribly wrong. Derek Ting is the film’s writer and producer. The film has received lukewarm reviews from critics compared to other films in the genre, the most notable example being Wall Street. Then again Ting didn’t have the luxury of a multi-million dollar Hollywood budget. $upercapitalist sold out when it made its global debut at the July Asian American International Film Festival in New York. It is set to feature in theatres in Hong Kong and Singapore.
Finally, Tokyo-based hedge fund Asuka Asset Management has launched an insurance linked securities (ILS) fund with USD40million reported Reuters, and will target investors in Japan and Asia. Such securities allow insurers, reinsurers or governments to manage risk by passing on potential losses to investors via the capital markets; they work in a similar fashion to asset backed securities (ABS), a form of derivative contract that gives investors access to income streams from the underlying asset.
Within insurance, the most common form of ILS is the catastrophe bond. Earlier this month, Asuka set up a Bermuda-based fund, Eastpoint Asset Management Ltd. to invest in products such as “cat bonds”. The new fund developed by Asuka and Eastpoint – Asuka ILS Opportunities Fund/Trust – will invest in a variety of ILS products. This is not a hugely popular asset class for Asian investors. They currently hold less than a 5 per cent share of ILS assets according to Masahide Kitade, CEO of Eastpoint Asset Management, but interest is growing, even though “they have to look across the world the find the best opportunities”. Earlier this month Third Point Re, a hedge fund backed by Dan Loeb’s Third Point LLC, launched a cat fund with Bermudian insurer Hiscox.