By Aradhna Dayal
As Asia reels under an unusually chilly bout of winter,
several positive developments are casting a warm glow of hope
on the Asian hedge fund industry.
In line with AsiaHedge’s prediction, a number
of high-quality post-crisis start-ups and re-launches are
beginning to scale up and reach the landmark of $500 million or
more in assets, and are in the process of either soft or hard
closing. Leading the pack is Nick Taylor’s
Senrigan, which is believed to have crossed the $800 million
mark, while Davide Erro’s Turiya Capital as well
as John Ho’s Janchor Capital have each accumulated
over $500 million.
This is a watershed event – one that just might
prove to be a turning point in the slowly recovering Asian
hedge fund industry, and provide it with the first set of
domestic managers that have the capacity, scalability and
institutionalisation to attract the top-notch global
allocators. In short, Asia is on the verge of getting its very
own post-crisis, home-grown billion dollar club.
A further spillover effect is coming from the soft closes of
many large international hedge funds with Asia components
(which gained most of the inflows last year) – which
is benefiting a number of the highly skilled, older Asia hedge
fund hands; several of them, such as Ophelia
Tong’s HT Capital and Andrew Main’s
Stratton Street, are gaining serious traction and are on their
way to soft/hard closes again.
Then there are niche firms such as the Hong Kong-based
global macro specialist Ortus Capital Management and Greater
China-focused Prime Capital, which too are attracting strong
inflows and moving towards the $2 billion mark. These players
have been around a long time and biding their time, but are now
reaping the rewards of generating strong performance during the
global meltdown, and unveiling ambitions to create world-class
Add to this the new wave of high-profile start-ups, mostly
prop desk spin-outs, that are expected to hit the Asian marquee
this year, and it is clear that Asia is headed towards offering
a fertile mix of locally based but global quality managers, and
with diverse investment opportunities.
Prominent among these will be Morgan Sze’s
Azentus (a spin-out from Goldman Sachs), Charlie Chan (the
former Credit Suisse star trader) and Seth Fischer (former CIO
of DKR Oasis). These launches should be sizable and will
rejuvenate the Asian start-up scene once again after a rather
lacklustre 2010 (when most of the high-quality launches had
been planned or delayed from the previous year).
In line with this trend, in this edition of AsiaHedge, we
bring you an introductory piece on the historically low-profile
Ortus, which believes that there is significant alpha to be
generated from the global currency space, as well as an update
on Turiya Capital. Also making for an intriguing read is a
feature on Value Partners, where founder Cheah Cheng Hye gives
a tongue-in-cheek account of the firm’s evolution
from a "hobby shop to indulge our passion for value investing"
to one of Asia’s largest asset managers running
$7.8 billion in assets.
On the investment front, though, Asian managers will
continue to face significant challenges, such as the alarming
inflation that is spawning in major cities across the region,
China’s cooling-down measures and,
internationally, the continuing clouds over the European and
the US economies.
A few pluses, on the other hand, include the fact that
corporate earnings are looking healthier than ever in Asia,
domestic consumption continues to be strong and QE2 will
continue to be nothing short of an adrenaline shot for the
AsiaHedge brings you a detailed 'Curtain raiser for
2011’ in this issue, debating how the market
dynamics will play out in areas such as the macro-economic
climate, regulation changes and capital raising.
Finally, AsiaHedge is introducing a series of regional
roundtables that will bring to the fore the pertinent issues in
various Asian markets. We kicked off with a high-powered COO
Roundtable in Hong Kong this month – and look forward
to bringing you full coverage of that in February.
Here’s wishing all our readers a fulfilling and