HONG KONG Jan 30 FRM Capital Advisors (FCA), a unit of Man Group Plc, is returning to Asia to back former Highbridge Capital portfolio manager Toby Bartlett's hedge fund, as a tough capital raising environment in the region lures seeders.
Hong Kong-based Bartlett, who got a licence for his Japan focused long/short equity hedge fund firm Arena Capital in August, will get $25 million initially from FCA, Patric de Gentile Williams, head of seeding at FRM, said by telephone.
FCA had pulled out seed capital from its lone Asia-based investment in Isometric Investment last year and had been looking for managers since. Arena is the first bet by the seeding division of FRM after it was acquired by Man Group in May 2012. Man manages $60 billion globally.
A seeding fund injects early stage capital into a hedge fund in exchange for a cut of the fund's revenues. Managers typically show reluctance to share profits but seeding businesses flourish when it gets tougher to raise capital.
They generally take 20-30 cents of every dollar earned by hedge funds in addition to their share of the return generated, a price many smaller managers and start-ups in Asia are willing to pay in exchange for long-term capital and other help.
Bartlett managed the Asian consumer sector for JPMorgan Chase Asset Management unit Highbridge with a focus on Japan, according to one of his former colleagues, who was not authorised to talk to the media and thus declined to be named. He left the firm at the end of 2011 to start his own fund.
The fund manager worked for Ken Griffin's Citadel Investment Group between 2007 and 2009 and global mutual fund firm Fidelity Investments between 2004 and 2007. He focused on Japan at both the firms, a marketing document obtained by Reuters showed.