Two ex-CSA senior executives have founded Oria Capital Management to take on the two untainted CSA funds and launch a new Asian fund of hedge funds.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Following an alleged scheme to defraud investors in Hong Kong-based CSA's hedge funds by the company's founder and former CEO Charles Schmitt (see previous Hedgeweek article), ex-CSA executives Jennifer Carver and Brian MacDougall have established a new company from which they plan to launch an Asian fund of hedge funds business.
Jennifer Carver is CEO of the new investment management company, Oria Capital Management, which has been registered in the Cayman Islands and licensed with the Securities and Futures Commission in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Hong Kong as an investment advisor.
Oria Capital Management has taken over the running of the two CSA funds with a combined AUM of $114 million that were untainted by the alleged fraudulent activity, namely the Dublin-listed Absolute Return Fund and the CSA Absolute Return Plus Fund.
The Dublin-based CSA Absolute Return Fund has been renamed the Oria Market Neutral Fund, and has been fully audited and cleared for investment by accounting firm Grant Thornton. The accounting firm Moore Stephens is completing an audit of the CSA Absolute Return Plus Fund which will be renamed the Oria Plus Fund.
CSA was planning to launch an Asian fund of hedge funds before the alleged fraud was uncovered, and Oria is understood to be preparing to launch the fund in the near future.
In addition to Carver and MacDougall, Oria Capital includes four other members from the ex-CSA team. Carver is also adding two non-executive directors to join Oria's investment committee. These are David Gong, a former litigator with the SFC, and Robert Jones, a former auditor and with several years of experience conducting risk management and due diligence on behalf of family offices.
Meanwhile, the HK authorities have reportedly located two thirds of the $200 million invested with the CSA Absolute Return Fund.
CSA's founder and former CEO Charles Schmitt is due to go to trial in September accused of transferring investor money to shell companies with bank accounts linked to his name, rather than to the underlying funds.