| HONG KONG
HONG KONG Oct 8 Swiss fund-of-hedge-funds
manager Gottex is partnering with two former executives
of Blackstone Group and Goldman Sachs to back
Asian hedge fund managers starved of capital since the global
Gottex, via a partnership with Headland Strategic Ltd
founded by Michael Garrow, an ex-Blackstone executive, and
Johannes Kaps, who earlier worked at Goldman, will offer hedge
fund managers as much as $75 million each from next year. It
aims to help them individually build a start-up capital of at
least $100 million.
The scale of the initial financial backing is substantial. A
typical seed investment in Asia has remained around $25 million
in recent years.
Seeders usually pocket 20-30 cents of every dollar earned by
a hedge fund in addition to their share of the return generated.
Many smaller managers and those looking to start in Asia are
willing to share revenues in exchange for long-term capital.
Gottex, via its partnership with Hong Kong-based Headland,
plans to start seeding funds by the first quarter of next year
and back two to three managers every year.
"The aim is for Headland Strategic to make fairly large day
one investments," Gottex co-founder Max Gottschalk told Reuters.
"We want to help each fund launch with a minimum of $100
million, a critical amount of capital for hedge funds to survive
and grow in Asia."
The partnership has also roped in V-Nee Yeh, co-founder of
Hong Kong-based money manager Value Partners, and
other investors to commit cornerstone capital to Headland
Strategic, Gottex's Gottschalk said.
"Asian dedicated hedge fund assets have seen virtually no
growth since the global financial crises, creating an ideal
environment for us to negotiate... with top-tier portfolio
managers," Kaps said.
Three-quarters of Asia's 1,300 hedge funds manage less than
$100 million, according to data from tracker Eurekahedge.
Headland will compete with the likes of Woori Absolute
Partners and Ascalon Capital, a unit of Australia's Westpac
Banking Corp, in seeding managers in Asia.
Asian hedge funds as measured by Eurekahedge returned an
average 9.7 percent through September in 2013, outperforming a
1.4 percent drop in the MSCI's index of Asia-Pacific shares
outside Japan during the period.