Reuters Edge

Artradis launches $500 million Asia convertible bond fund

SINGAPORE (Reuters) - Artradis Fund Management, a Singapore-based hedge fund manager with over $4 billion in assets, said on Monday it plans to raise $500 million for a fund that will invest in Asian convertible bonds.

“The fund will be opportunistic, largely focused on buying cheap convertible bonds in Asia including Japan,” Artradis said in a statement. “Initially the fund will not deploy leverage and assets will be held in custodian accounts to minimize counterparty risk.”

The launch comes at a time when hedge fund managers are facing heavy redemptions from investors spooked by global financial turmoil, after five straight years of gains. Many analysts have expected the closure of some hedge funds globally but few have been publicly announced.

Industry sources said Artradis is among the few hedge fund managers still making money in the current volatile environment.

The hedge fund manager’s flagship Barracuda fund, which uses equity arbitrage strategies, was up almost 12 percent year to date, while its AB2 Fund, which relies on equity arbitrage boosted by leverage, has returned 21 percent as of end-September.

The Eurekahedge Asian Hedge Fund Index is down 14.3 percent up to September, and its Japanese index is off 9.2 percent, according to the data provider’s latest estimates. This compares with a 3.2 percent loss for its North American Index.

Reporting by Kevin Lim and Saeed Azhar; Editing by Neil Chatterjee