Quant to raise $50-$100 million fresh funds

SINGAPORE (Reuters) - Quant Asset Management, a hedge fund manager that uses computer models to invest, said on Wednesday it could raise up to $100 million for its Asian fund and was talking to more investors for fresh money.

Quant, founded in Singapore in 2003, selects 120 out of 6,000 stocks for its global portfolio and 60 out of 2,000 stocks for its Asian fund.

The investment process is based on computerized programs which track stock valuations, earnings growth and changes in analyst ratings.

Quant Asset Management director and co-founder Frank Holle said the firm was also looking to increase the overall size of assets under management.

"We are $200 million now, we could double this year to $400 million," he said at the Reuters Hedge Funds and Private Equity Summit in Singapore.

"But it's also hard to say because we are talking to one counterparty who could double our assets next month, you never know."

Quant plans to grow its QAM Global Equities Fund to $1 billion over the medium term, added Holle, who founded Capital Fund Management in 2001.

Several computer-driven hedge funds have imploded in the United States over the past few months amid unprecedented market turbulence, with two Bear Stearns BSC.N hedge funds among the key casualties.

But Quant has been relatively unscathed, thanks to downside protection from going long on individual stocks and shorting the MSCI Asia Pacific or World index futures, Holle said.

Its QAM Asian Equities Fund has garnered a return of 2.32 percent year-to-date, while its QAM Global Equities Fund has achieved a return of 0.11 percent in year to date.

Last year, the Asian fund rose 66 percent and the global fund climbed around 45 percent.

"We don't short individual stocks, but we short the markets. The common sense is if you own 120 stocks and you short the markets, you can never go too far wrong," he added.

Holle, who also worked at Merrill Lynch MER.N in London during the 1990s, runs Quant Asset together with his Thai partner Chatchai Ngampakdeepanich, who has a Masters degree in computer engineering.

Prior to this, he managed Holle Guilonard, a company specializing in international electronic equities trading.

"The investment managers at the firm do nothing basically -- it's all programs that we run that invest for us. We build in a dynamism in the models, where the models will adapt very quickly to what is happening in the markets," Holle said.

The fund focuses on cheap stocks with high earnings growth prospects, and about 70 percent of the portfolio changes every month.

"Sometimes (the investments are skewed) more towards valuation, sometimes more towards earnings momentum," he added.

Holle said stocks in developed markets were now looking more attractive than those in emerging markets.

"We've had a very big overweighting up to three months in Asia, and now, that's not the case any more. Asia has become more expensive and has less earnings growth compared to a while ago," he said, pointing to India as a key example.

"The developed markets have become much cheaper than the emerging markets," he added, citing the U.S., UK and Japan as attractive spots.

(For a summit blog: summitnotebook.reuters.com/)

(Additional reporting by Tan Weixin; Editing by Jean Yoon)