By Nishant Kumar
HONG KONG Nov 11 Hong Kong-based Rega
Technologies plans to launch a China-focused long/short equities
hedge fund in January with about $40 million in initial capital
from partners, friends and family, its Managing Director
Kin-Leung Chan said.
The firm, founded by a former Hong Kong Polytechnic
University's assistant professor of finance Dr Jie Zhang and
Gang Fu, who worked at Hong Kong-based Vision Investment,
received a licence from the market regulator last week.
It is now in talks with institutions in China and Singapore
and those in Europe and the United States to raise funds, said
Chan, a former investment director of the asset management arm
of Polaris Securities (HK) Ltd who joined Rega earlier in 2011.
Rega will mainly trade stocks listed on the Hong Kong
exchange and has a capacity to take in $1 billion.
The fund will also trade China A shares using the QFII quota
of its prime broker, Goldman Sachs, Chan said referring
to a licence which allows foreign investors to buy domestic
The fund's launch comes at a time when investors are shying
away from allocating fresh capital to Asian hedge funds as a
lingering debt crisis in Europe and sluggish growth in the
United States keep them on sidelines.
The fund is aiming for a slice of a market which is chased
by some 150 China focused hedge funds managing about $14 billion
between them, according to data from industry tracker
"We know how to short," said Chan, who has 17 years of
"We can use short book to generate alpha - instead of most
other peers only using futures or options to hedge," Chan, who
also worked as a portfolio manager at Quam Asset Management.
Both Dr Zhang, whose research interest includes equities,
derivatives and liquidity, and Gang Fu, who also worked at
McKinsey, have more than a decade of trading experience each.
Rega has also roped in Jie Gan, a professor of finance at
Cheung Kong Graduate School of Business and Xin Chang, an
associate professor of finance at Nanyang Technological
University, Singapore, as directors.
The fund will mainly focus on undervalued stocks screened by
its in-house quantitative models which evaluate financial
statement consistencies among others, Chan said.