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Hedgeweek’s Weekly Asia Alternative Investment Summary

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Tracking the latest hedge fund developments across Asia Pacific

Japan Fund hires Chinese economist to widen client base

Funnex Asset Management Co., a Japanese fund manager, is planning to tap into Asia’s regional growth story by appointing Xiao Minjie, a Chinese native and former senior economist at Daiwa Institute of Research, as its President. The company’s $85 million KPI hedge fund uses a long/short strategy to invest in large and small cap listed Japanese equities. It is hoped that Xiao’s appointment will widen the fund’s exposure and client base. “With Xiao joining our firm we are seeking new opportunities to bring Asian money into Japan’s stock market,” says Eriko Ishida-Kawai, Head of Global Business.

Asia Volatility Fund goes operational

Singapore-based RSR Capital Pte has today launched its Caerus Arbitrage Asia Fund. Remi Colinmaire, one of four ex-derivatives traders in the RSR Capital partnership (along with Christophe Delorme, Robert Webb and Serge Handjian) said in a phone interview that the fund will initially target private investors during its offering period and hopes to secure $15-25 million before trading in August. Delorme is confident about the timing. “There’s no good news in sight. Occurring default in sovereign debts in the near future is a possibility.” The fund will look to capture market volatility and the accompanying alpha using multiple strategies, some of which will be more algorithmic-based. “We will be a pure Asia arbitrage fund and take opportunities in the fact that Asian countries are not that correlated economically anymore,” adds Delorme. The fund hopes to reach $500 million.

Asia’s dark pool space deepens

The number of Asian dark pools is rising. Citigroup recently launched its Citi Match platform, noting strong growth in Hong Kong and Japan and hitting a record A$1.53 billion in Australia last month. Many commentators expect dark pools to become aggregated across the region, but Yang Xia, UBS head of direct execution services Asia Pacific, is more pragmatic: “In terms of numbers we have not seen a dramatic uptick in Asia.” Such growth could be in response to brokers’ desire to lower front-2-back execution costs/fees, and Xia believes that “with more alternative 3rd party trading destinations, Asia will need a solution on market share calculation and trade reporting.”

Matrix to launch Asia Ucits III fund

Matrix Asset Management is preparing to launch a pan-Asian long/short equity UCITS III fund at the end of July. The fund will be managed by Rupert Foster and will look to replicate the firm’s Asia hedge fund strategy by focusing on China and Japan. “I’m trying to offer a traditional hedge fund in the Ucits model,” explains Foster. “Many are long-biased, but I’m looking to add value on the short.” Key sectors will include consumer, industrial and technology. Two analysts will join the team and locate to Hong Kong. Strategically, Foster says: “I expect the portfolio to be short on China and long Japan until some time later this year when I expect to reverse the positions.”     

Prudent Fund targets Asian credit markets

Prudent Asia Capital Management, a Singapore-based firm, has launched the Prudent Asia Balanced Fund with a focus on low-grade corporate bonds that co-founder, James Lee, believes will be less affected by market volatility. Lee was quoted in Bloomberg as saying: “We’re more focused on developed economies within Asia, such as Japan, Korea and Australia. Within that, defensive sectors which aren’t cyclical, like banks, utilities and waste-management companies.” At 4.85%, spec-grade Asian debt has outperformed investment-grade debt (4.21%) so far this year.   

People Moves

RAB Capital has appointed David Seex as its Asia CEO. Seex will oversee the company’s Hong Kong office. FRS Global is to open an office in Shanghai, with Mark Looi joining to become regional sales director for SE Asia. Looi will be based in Singapore. State Street has appointed Yvonne Wong as MD and head of business development for Asia Pacific to its enhanced custody business.

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