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Fortress Investment Group closes Fortress Japan Opportunity Fund II at USD1.65billion…Tiger Asia Partners fined USD816,500 by Japanese regulator…

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Vistra Fund Services (VFS) this week announced further expansion in Asia with the opening of its Singapore office. VFS is a global independent fund administrator and part of the Vistra Group, a global provider of corporate, trust and fiduciary services, as well as fund administration and outsourcing services.

The firm already has an established presence in Hong Kong, having opened its first office there in February this year to complement the group’s fund administration operations in Luxembourg and Jersey. Assets under administration for VFS Asia have, within 10 months, already grown to USD3billion, supporting a range of funds from private equity and venture capital through to hedge funds and fund-of-funds.

Charles Kwun, managing director of Vistra Fund Services Asia
, said the firm was “delighted” to be expanding their footprint in Asia. “With four new hires and our second office in Singapore, VFS will be able to keep up with client demands and provide bespoke fund administration services to Singapore domiciled funds as well as asset managers in South East Asia.

The Singapore office will be jointly managed by Kwun, Andrew Mascall-Robson, regional commercial director, and Jean-Pierre Koolmees, managing director of Vistra Singapore

Following the USD60million settlement for insider trading involving Bill Hwang’s Tiger Asia Management and Tiger Asia Partners hedge funds and the SEC last week, Japan’s securities watchdog has fined Tiger Asia Partners USD816,500
. The Securities and Exchange Surveillance Commission (SESC) claims the US hedge fund manipulated the market through trading shares of Yahoo Japan Corp reported Reuters

The SESC cooperated with the US regulators during its investigation of Tiger Asia and the subsequent fine represents the highest-ever penalty levied by the Japanese regulator in a market manipulation case. The SESC could not, however, find evidence of actual insider trading by Tiger Asia Partners. 

Specifically, the hedge fund bought 32,960 Yahoo shares from four brokers on 17 March 2009, leading to a more than 4 per cent jump in the share price. Tiger Asia later sold 690,000 Yahoo shares, including the shares they’d purchased, after Yahoo announced a share buyback plan according to the SESC. The regulator said that Tiger Asia Partners’ heavy purchases from several brokers created an impression that Yahoo shares were in demand; their activity accounted for 30 per cent of trading volume in Yahoo shares during the afternoon session on the day said the SESC.     

Macquarie Group Ltd intends to shut its Singapore-listed infrastructure fund after selling assets
– which include a port and highway in China – in anticipation that its share price will not reflect the value of its holdings reported Bloomberg this week. Excess cash in the Macquarie International Infrastructure Fund (MIIF) is to be distributed as a special dividend, and three assets are to be divested following a review by its adviser CIMB Group Holdings Bhd. Chairman Chiang Meng Heng said the fund has about USD49million in cash.   

Heng said they were looking at “narrowing the discount”, adding: “It will be very, very difficult to close the gap between the share price and the net asset value given current market circumstances, so we decided to return money back to shareholders.” The fund, which launched in 2005, was shutting because Heng said it couldn’t find good assets in Asia or a means to boost its share price.

Fortress Investment Group LLC, the USD50billion global investment firm, announced this week the successful close of Fortress Japan Opportunity Fund II (FJOF II) at USD1.65billion
. This follows the launch of the Fortress Japan Opportunity Domestic Fund, which closed in June 2010 with USD800million. Both funds focus on Japanese real estate-related debt and other assets and seek to capitalise on dynamics related to significant deleveraging by financial institutions and near-term debt maturities, including supply demand gaps and limited credit availability. 

FJOF II had already made 10 investments as of 30 September 2012 with approximately JPY30billion of net invested capital and is expected to be fully invested over the next two years. Thomas Pulley, CIO of Fortress Japan, was quoted as saying: “
We anticipate that deleveraging and the disposition of non-core assets will remain at heightened levels in the coming years, and that significant opportunities will result for select managers. We believe the Fortress team is well-positioned to capitalize on these opportunities on behalf of our investors.”

“The successful close of FJOF II, and the performance to date of FJOF, exemplify our ability to bring together deep region-specific expertise and the substantial resources of our international sourcing, underwriting and asset management platform,” added Peter Briger, Fortress Co-Chairman and Head of the company’s Credit and Real Estate business. 

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