(Repeats story issued late on Wednesday)
* Huttenlocher exit shows more parting ways with global firms
* Like ex-Goldman trader Sze, Huttenlocher starting own fund
* New Asia hedge funds raised $3.8 bln assets in 2010,up 50%
* Asia has seen fund closures too
By Nishant Kumar
HONG KONG, March 2 The $125 billion Asian hedge
fund industry's star power just got bigger, with Carl
Huttenlocher quitting Highbridge Capital as head of Asia
investments to set up his own start-up in the region.
As the fund-raising climate for hedge funds improves and
Wall Street banks wind up proprietary trading desks to comply
with the 'Volcker rule', star managers and traders are taking
matters into their own hands, and setting up brand new
Huttenlocher's surprise move adds to the growing trend that
marks a shift away from global groups.
It also lifts the prospects of the nascent Asian hedge fund
industry as tried and tested fund managers expand options for an
increasing number of institutional investors aiming to raise
exposure to the region in search of higher yield.
"Asian managers are becoming more autonomous, which reflects
their increasing sway in the global markets and their ability to
go out and raise capital on their own rather than use the ladder
of a global platform," said Frederick Ingham, head of hedge fund
investments in Asia-Pacific for money manager Neuberger Berman.
"A trend for spin-outs is positive for the Asian hedge fund
industry, because it shows Asian hedge fund managers can stand
on their own two feet and run viable, standalone businesses."
The Volcker rule limits the extent to which banks can make
bets with their own money.
Huttenlocher has quit JPMorgan's hedge fund firm
Highbridge Capital, making the New York-based firm wind down its
Asia-focused fund, four sources familiar with the matter told
Reuters on Tuesday.
The hedge fund veteran, whose departure from the $26 billion
hedge fund surprised many in the Asian hedge fund industry, is
set to start his own fund, sources said.
Huttenlocher joins the likes of former Goldman Sachs
trader Morgan Sze, who is at the centre of one of the biggest
hedge fund start-ups ever in Asia and expected to launch his $1
billion-plus fund in the second quarter. [ID: nTOE72001Z] [ID:
The growing list also includes Charlie Chan, former Credit
Suisse proprietary trader, and Benjamin Fuchs who
earlier worked as a proprietary trader for the now bankrupt
Lehman Brothers in Tokyo, according to media reports.
New York-based hedge fund Fortress Investment Group ,
which opened an office in Singapore in October, has moved Adam
Levinson, its co-chief investment officer of flagship global
macro funds, to the city-state to lead its Asia-specific macro
Stardom though is no guarantee of success and the region has
seen fund closures, such as Minerva, founded by Stanley Ku, the
former head of Fortress's Hong Kong office, and Hong Kong-based
Cypress Lane, started by former Goldman Sachs trader Shafiq
Karmali. But interest in start-ups remain high.
MORE FUND LAUNCHES
Boosting the confidence is success of new funds in the
region with assets raised by them surging nearly 50 percent to
$3.84 billion in 2010.
The number of fund launches increased to 95 last year from
78 in 2009 while the average launch size rose to $40 million
from $33 million, according to a survey by AsiaHedge, indicating
revival of interest in the region after the financial crisis
wiped out trillions of dollars in investor wealth.
Some of the success stories include Blackstone Group
seeded hedge fund Senrigan Capital, which was launched by former
Citadel executive Nick Taylor in 2009 and quadrupled assets to
above $800 million last year.
Others such as Turiya Capital, launched by former Goldman
Sachs executive Davide Erro and Orchard Capital Partners, which
spun-off Stark Investments in 2009, are now exceeding $500
million in assets.
"2011 is already shaping up to be a game-changing year for
the Asian hedge fund industry," said Mark Wightman, head of
asset management strategy for Asia-Pacific at specialist
technology group SunGard.
The region "is firmly on radar and every investor now has a
strong reason to add Hong Kong and Singapore to their must visit
cities this year," he added.
(Editing by Muralikumar Anantharaman)
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