China in auto power play
It might not shake up the industry just yet, but China's interest in Volvo and Saab is the start of something big in global autos, writes columnist Wei Gu. Commentary
Asia-focused Penta hedge funds up 123 percent through October
NEW YORK, Dec 10 (Reuters) - Penta Investment Advisers Ltd., an Asia-focused $4.8 billion hedge fund group, is up 123 percent in both of its two main funds in 2007 through October, demonstrating the benefits of strong China markets, according to a recent note sent to investors.
Penta, which is run by former Soros Fund Management trader John Zwaanstra, also said it will close its $2.2 billion Penta Asia Fund to new investors next month, according to the letter. Penta didn't say why the fund will make the move, but top-performing funds occasionally shut doors to prevent runaway asset growth.
Formerly called Penta Japan Fund, the Asia Fund is up 122.8 percent through October, according to the letter, making it one of the best performers among hedge funds this year. Another of its funds, the $1 billion Asia Domestic Partners fund, is up 123.5 percent through October 2007.
"Asian markets (except for Japan) surged forward in October," the letter said. "As with the prior month, several markets recorded double-digit gains with several hitting new all-time highs. The hunger for risk prevailed; valuations rose and IPO's were red hot."
Penta could not be reached for comment. Performance figures for November weren't available.
Penta's performance far exceeds the average performance for similar hedge funds in the region. Fund tracker Hedge Fund Research said Asia-focused hedge funds posted average performance of 39.5 percent in the year through October, the strongest of all strategies in its indexes.
Penta attributed gains to "significant earnings upgrades" in a number of its long holdings, including real estate developers in Hong Kong like HKC Holdings (0190.HK) and Sun Hung Kai (0086.HK). It also said "energy related exposure performed strongly with coal miners once again leading the charge," according to the letter.
A majority of the firm's long and short investments are Hong Kong and China, according to the letter.
It also said its shorts on some metal and heavy industry companies in Japan "performed well." But "detractors on the short side were across a range of industries with the most unhelpful including technology stocks and some positions in the food and beverage sector." It didn't name any of the companies it shorted.
In addition to the Penta Asia and Penta Domestic Partners funds, it manages the $1.19 billion Penta Asia Long/Short fund and has $442.5 million in separately managed accounts. (Editing by Phil Berlowitz)
