| HONG KONG/SEOUL, March 6
HONG KONG/SEOUL, March 6 Hyundai Securities Co
Ltd is seeding capital to a new Singapore-based
hedge fund, making its first such play outside South Korea in a
sign that the regional industry may be turning a corner after
years of stagnation.
Returns at Asian hedge funds are up 5.25 percent this year,
as measured by tracker Eurekahedge's index, outperforming a 2.12
percent gain in global peers and raising hopes of a recovery
after net outflows worth about $3 billion in 2012.
A Hyundai Securities spokesman on Wednesday said the firm
planned to set up a fund in Singapore under the leadership of Dr
Kim Hong-shik, a derivatives specialist who headed the Asian
equity-linked products for ABN AMRO and was founding member at
K3 Capital Management, a Singapore-based hedge fund.
The South Korean firm gave no further details, but three
sources familiar with the plan said the fund, named AQG Capital
Management, would start trading with about $100 million in the
second half of the year.
AQG Capital has also hired Minsoo Seo, former equities
portfolio manager at sovereign wealth fund Korea Investment
Corporation, said the sources who declined to be named as they
were not authorised to speak on the plan.
ACTIVITY PICKING UP
Most of the money will come from Hyundai, part of a trend
that shows institutions and seeders are turning active in Asia
once again, the sources said.
"There are some changes at the margin," said Peter Douglas,
founder of Singapore-based hedge fund consultancy GFIA.
"There's a little bit of interest coming back into some of
the boutiques and especially some of the really experienced
market specialists," he added.
Asian hedge funds managed about $127 billion at the end of
last year, nearly $50 billion below the peak assets hit in 2007,
Eurekahedge data shows. By comparison, the global industry
recovered to manage $2.3 trillion, up from $1.9 trillion in
2007, according to data from industry tracker HFR.
Hyundai joins the likes of FRM Capital Advisors (FCA), a
unit of Man Group, which returned to Asia in January to
back former Highbridge Capital manager Toby Bartlett's fund.
FCA, which had pulled out seed capital from its lone
Asia-based bet in Isometric Investment last year, is seeding
Bartlett's Arena Capital with $25 million.
Last month, Singapore-based Mosaic Asset Management, founded
by former Brevan Howard and Goldman Sachs executive
Tristan Edwards, said it had won seed capital from Woori
NewAlpha Fund LP, a joint venture between Woori Absolute
Partners and French money manager NewAlpha Asset Management.
AQG Capital will follow an equities long/short
market-neutral strategy and use quantitative techniques to bet
on stocks. Such funds aim at profiting from both rising and
falling prices of securities.
Quant fund managers follow a set of mathematical techniques
to evaluate risk, pricing and timing in financial markets,
unlike those following fundamental and technical analysis that
largely depend on subjective calls.
The hedge fund will compete with regional peers such as $1.5
billion Macquarie Asian Alhpa and $56 million MNJ Asia-Pacific
Absolute Return fund, which have produced annual returns of just
over 10 percent since launch.