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INTERVIEW - Hedge fund Tantallon triples assets from lows, eyes $500 mln
May 19, 2011 / 9:31 AM / 6 years ago

INTERVIEW - Hedge fund Tantallon triples assets from lows, eyes $500 mln

SINGAPORE (Reuters) - Singapore-based hedge fund Tantallon Capital has tripled assets to about $300 million from 2009 lows and hopes to grow assets to $500 million, co-founder Alex Hill said, as investor interest in Asian hedge funds revives and performance improves.

The firm, founded in 2003 by former Morgan Stanley (MS.N) wealth management executive Hill and Nicholas Harbinson, who earlier worked at Merrill Lynch and Goldman Sachs, was one of the biggest hedge funds in Singapore in 2008, managing about $1.7 billion at its peak.

However, it suffered major outflows like many other Asian hedge funds who did not gate redemptions during the global financial crisis.

Hedge funds have found it hard to regain assets since the financial crisis, especially in Asia where assets managed by the industry remain well below peak levels of $192 billion in December 2007, according to industry tracker Asiahedge.

Hill said his funds’ performance was improving and the firm has added about $50 million worth of assets under management since the start of the year.

“Most of the growth has come from Europe, we have been added to two platforms there and we have picked up some segregated mandates,” Hill told Reuters in an interview.

“It does feel as though money is beginning to return and the bulk of the money in 2010 that went primarily to the top 100 global hedge funds perhaps is beginning to look below that cut off point again,” he added.

Of the $55 billion in new money invested in hedge funds last year, 80 percent went to big funds, or firms that oversee more than $5 billion in assets, data from Hedge Fund Research showed.

In Asia, that divide was more pronounced given that nine out of every ten managers in the region have $200 million or less in assets, data from Eurekahedge shows.

NEW INVESTORS

Hill, who has over two decades of experience in the securities and finance industry, said that while some old clients were returning, the fund has also attracted new investors and have started adding to the team.

The firm employs 17 staff and added John Muelle in New York. Muelle resigned from Tantallon last year to work for JP Morgan (JPM.N) in Japan but has rejoined the firm.

“I would like us to grow headcount in Singapore in the space of the next 12 months,” the executive said.

Tantallon Capital runs three strategies. The flagship Tantallon Fund, an Asian long/short equity hedge fund, gained 3.9 percent in April, according to data compiled by Thomson Reuters Lipper.

The Tantallon Emerging Markets Fund, a long bias, value driven long/short fund, and the Tantallon Bass Rock Fund, a long only fund investing in Asia Pacific ex-Japan, rose 2.25 percent and 2.57 percent respectively.

“Performance has started to pick-up... the firm’s assets have grown, so we are increasingly getting back to a critical level of assets,” Hill said, adding his funds had been added to Oyster Funds and Vitruvius Funds platform in Europe.

“I would like to see assets under management grow to $500 million at the first stage and then to $1 billion, with an even spread between strategies,” Hill said but declined to give a timeframe for the asset growth.

Reporting by Nishant Kumar; Editing by Muralikumar Anantharaman and Dhara Ranasinghe

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