* GLG, Soros, Paulson have opened shop in Asia’s financial
centre
* Antony Hung, a Bank of America veteran, to head HK
operation
* HK office in licensing phase; to have Asia-focused traders
By Nishant Kumar and Stephen Aldred
HONG KONG, April 13 (Reuters) – Goldman Sachs-linked Capula
Investment Management is expanding its $13 billion business into
Hong Kong, according to sources, becoming the latest major
investor to jump into the region where hedge fund players are a
small but growing part of the market.
While thousands of hedge funds across the globe manage
nearly $2 trillion in assets, relatively few have so far
established a large presence in Asia, despite the region’s rapid
economic growth in the last five years.
That is changing fast, with GLG Partners, Soros Fund
Management and Paulson & Co among the funds that have set up
shop in Hong Kong as a major centre for growth, especially given
its proximity to China.
The sources, who had direct knowledge of the matter, said
Capula would open an office in Hong Kong, which would be fully
operational at some point this year.
“It’s yet another large, successful international fund
setting up in the region as evidence of the increasing need to
be in Asia to find opportunities and the availability of local
talent,” said Mark Wightman, global head of alternatives
strategy at technology firm SunGard.
“It also highlights the evolution of the Asian hedge fund
market from being historically an equity long/short play, as we
now see growth in multi-strat, macro and fixed income
strategies,” he added.
London-based Capula, which also has offices in Greenwich and
Tokyo, declined to comment.
The hedge fund accepted $200 million from sovereign wealth
fund China Investment Corp in 2009, and was selected by
the State of Wisconsin Investment Board in the United States for
its first-ever allocation to hedge funds last year.
Antony Hung, a Bank of America Merrill Lynch veteran who
worked for nearly two decades in the fixed income division at
the Wall Street bank, will head the Hong Kong office, which will
have traders focused on Asia, the sources said.
Hung was Merrill Lynch’s head of wealth management in
Asia-Pacific before retiring in 2010. He steered the business
through the financial crisis in 2008 and the transition after
Merrill Lynch was taken over by Bank of America in early 2009.
ROUGH YEAR FOR SECTOR
Capula, in which Goldman’s Petershill fund, which
takes stakes in hedge funds, bought a nearly 20 percent stake in
2008, is currently in the licensing phase in Hong Kong.
The hedge fund manages fixed income trading strategies along
with a tail-risk hedge product, which aims to protect investors
from rare and extreme events in financial markets.
Capula was founded in 2005 by Yan Huo, an electrical
engineer who moved into securities trading after earning his
doctorate from Princeton University, and Masao Asai, a former
executive at UFJ International.
The sources did not disclose how much assets will be managed
out of Hong Kong or if Capula will launch new funds.
The move adds to a revival in the hedge fund industry in
Asia after a rough 2011 when funds lost about 8 percent, leaving
the industry fighting a tough battle to retain clients and
spelling troubles for start-ups, prime brokers and service
providers who had pinned hopes on a potential expansion.
Well-known funds, such as the $300 million Thaddeus Capital
fund and Boyer Allan Investment Management, which once managed
$1.8 billion, have shut with the number of closures in 2011
surging past launches for the first time since 2008.
However, 2012 has the makings of a better year for the
industry, with Asia-focused hedge funds tracked by Eurekahedge
clocking average gains of nearly 6 percent year to date and with
some high-profile hedge fund launches set for the months ahead.
Major start-ups include one by former Nomura Holdings Inc
trader Benjamin Fuchs, who will launch a multi-strategy
hedge fund on June 1 with backing from Japan’s largest
investment bank.
