May 27, 2011 / 10:13 AM / 7 years ago

UPDATE 1-Principia joins ex-Goldman Sze with $750 mln Asia hedge fund

* Plans to launch hedge fund later this summer

* To run CTAs, credit and equity strategies

* To have offices in Beijing and Hong Kong (Adds details, background, quote)

By Nishant Kumar

HONG KONG, May 27 (Reuters) - Principia Capital Advisors is set to launch a $750 million hedge fund later this summer, three sources familiar with the matter said, joining the ranks of former Goldman Sachs trader Morgan Sze’s blockbuster launch last month.

Principia, named after a famous book by the 16th century French philosopher and writer Rene Descartes, is starting with commodity trading advisers or CTA, a hedge fund strategy betting on long-running trends in markets, credit and equity strategies, the sources said.

The sources identified Hang Hu as one of the top executives. Hu’s background and Principia’s backers could not be immediately ascertained.

Principia will have offices in Hong Kong and Beijing, two of the sources said, with equity strategy run from Hong Kong.

The launch will make Principia the second-biggest start-up in Asia this year after former Goldman Sachs trader Morgan Sze started with about more than $1 billion for his multi-strategy hedge fund.

“The wave of investor demand for Asian hedge fund product has coincided with an increase in the number of talented, ”next-generation“ regional managers, who adopt sophisticated investment strategies, risk management and infrastructure,” said Frederick Ingham, head of hedge fund investments in the Asia-Pacific for money manager Neuberger Berman.

“This has led to an increase in significant and sizeable flows into the region’s alternatives sector.”

Hong Kong-based Sze, former head of Goldman’s Principal Strategies group, launched Azentus Capital on April 1 and is set to grow the fund to more than $2 billion in the next few months, sources familiar with the matter said. [ID:nL4E7GH06W]

Interest in hedge funds has staged a comeback with the industry adding $93.9 billion in the first four months of the year or about $28 billion more than the corresponding period last year, according to data from Eurekahedge.

Asian hedge funds have witnessed twelve consecutive months of net positive asset flows after a recovery last year.

Asian hedge funds added $20 billion to their assets in 2010, backed by positive returns and accelerated flows in the second half of the year as investors returned to bet on the fast growing region.

Assets under hedge funds focused on the region rose to $152.3 billion in 2010, up from $132.2 billion a year earlier, a survey by fund tracker AsiaHedge showed.

About half of the asset growth was due to net inflows with 95 new hedge fund launches contributing $3.84 billion to the asset growth in 2010, a rise of 50 percent from a year earlier.   Principia executives could not be reached for comment. Sources declined to be identified as they were not authorised to comment. (Reporting by Nishant Kumar; Editing by Jacqueline Wong)

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