* Morgan Sze's Azentus Capital has commitments of over $1
bln - sources
* Fund received asset management licence in February
* Launch strengthens reviving flows into $152 bln Asian HF
(Adds details, background)
By Nishant Kumar
HONG KONG, March 31 Former Goldman Sachs
trader Morgan Sze is set to launch his highly anticipated $1
billion-plus hedge fund in Hong Kong on Friday, three sources
familiar with the plan told Reuters.
Sze's Azentus Capital has received commitments of more than
$1 billion for his multi-strategy fund, said the sources, who
declined to be identified because the plan has not been made
The launch comes as a growing number of high-profile traders
plan hedge funds as Goldman and other Wall Street banks shut
proprietary trading desks in response to the "Volcker rule."
That rule limits the risks banks can take with their own
capital in the wake of the global financial crisis.
"It's a long time since Asia has seen a launch of that
size," said Andrew Gordon, head of alternative investment
services at BNY Mellon in Asia Pacific.
"I think it's the sign of the ongoing progress of the
industry which is a good news. Maybe the less good news is that
it's making more difficult for some to launch small and grow
big," he added.
Hong Kong-based Sze, former head of Goldman's Principal
Strategies group, received an asset management licence for
Azentus Capital in February from the Securities and Futures
The firm, one of the biggest hedge funds to launch since the
onset of the credit crisis, is one of the most
high-profile in Asia, home to only 18 hedge funds managing more
than $1 billion.
By comparison, London has 63 managers with assets of more
than $1 billion, while New York has 128, data compiled by
industry tracker Hedge Fund Intelligence shows.
The fund, which plans to adopt a number of investment
strategies including equity long-short, risk arbitrage and
special situation investing, has hired Roger Denby-Jones, former
chief executive of Asia-focused hedge fund Boyer Allan
Other team members include former Goldman Sachs (Asia)
executives Bruce Kirk, Mohan Rajasooria, Jenny Sun Kin-nam and
The launch is a significant milestone and lifts the
prospects of the $152 billion Asian hedge funds 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.
It also strengthens the revival of flows into the industry
that saw 95 new launches attract $3.84 billion in 2010, an
increase of 50 percent from a year earlier, data from industry
tracker AsiaHedge showed.
Last year, hedge funds in the region added $20 billion to
their assets, backed by positive returns and accelerated flows
in the second half of the year.
Some of the biggest launches were Gaoling Natural Resources
Fund ($250 million) from Hillhouse Capital, Hareion Fund ($220
million) from Areion Asset Management and Sertorius Global
Opportunities Fund ($200 million) from CSAM Asset Management.
More significantly, funds such as Senrigan Capital, seeded
by Blackstone , quadrupled assets to above $800 million
Others such as Turiya Capital, launched by ex-Goldman Sachs
executive Davide Erro and Orchard Capital, which spun-off Stark
Investments in 2009, saw assets grow to close to $500 million.
Some of the other big expected launches in 2011 include
funds planned by industry veteran Carl Huttenlocher who quit
Highbridge Capital recently.
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.
Interest in the region is on the rise with the Asia Pacific
emerging as the top-ranked geography for net investor demand in
2011, according to a survey released by the prime broking unit
of Credit Suisse earlier this month.
Nearly half of the more than 600 investors surveyed by
Credit Suisse said they had demand for exposure to the region
which contributes about a fifth to the global hedge fund assets
of about $1.9 trillion.
(Editing by Ken Wills and Vinu Pilakkott)