* Tiger invests in two of Nezu Asia’s hedge funds
* Capital to help the funds grow collective AUM to $125 mln
* Funds’ advisers to be based in Tiger’s offices in New York
* Nezu Asia aims to double its total AUM to $800 mln in 2011 (Adds quote, background)
By Nishant Kumar
HONG KONG, Jan 24 (Reuters) - Tiger Management, the investment group founded by hedge fund industry pioneer Julian Robertson, has invested $50 million in Hong Kong-based Nezu Asia, seeding two of its Asia-focused hedge funds.
The move by Robertson, who established Tiger as one of the industry’s top firms by delivering average annual returns of 30 percent in funds whose assets peaked at $22 billion in 1998, is a significant endorsement of the Asian hedge funds industry.
Tiger has seeded the Nezu Asia Fund, a long/short equity fund, and the Japan focused short-biased equity strategy Nezu Kuma Fund, according to a document obtained by Reuters.
The seed capital will help the funds grow their assets under management to $100 million and $25 million, respectively.
Nezu Asia managed more than $1 billion before the financial crisis in 2008 triggered large redemptions across Asian hedge funds. Now it’s banking on the deal for a turnaround and hopes to double assets to $800 million by the end of 2011.
“We anticipate that our strategic partnership with Tiger will improve our ability to access capital and strengthen our entire suite of funds,” Richard Kincaid, partner and chief operating officer of Nezu Asia, told Reuters in a telephone interview.
Billionaire Robertson has grown what has been called the $1.9 trillion hedge fund industry’s biggest family tree, helping to start more than three dozen hedge fund firms.
Robertson, 78, closed his funds and gave his investors their money back a decade ago. He has kept his hand in the business by offering many of his former colleagues — the so-called Tiger cubs — money to start their own hedge funds.
David Snoddy and Sohei Taki are advisers to the two seeded funds. Snoddy is a former employee of Tiger Management in Tokyo in the late 1990s. Both managers will be based in Tiger’s offices in New York.
Nezu Asia, established in 2000, manages about $400 million in six hedge funds. It employs 28 staff across its offices in Hong Kong, Singapore and New York and has a research presence in Japan.
The firm is hiring a marketing executive, to be based in New York, as it readies to build on the success of Tiger’s deal at a time investors are returning to bet on Asia’s potential to generate relatively higher yield.
About a fifth of the 100 leading institutional investors in hedge funds surveyed by alternative assets research firm Preqin expressed an improvement in their levels of confidence in hedge funds in 2010, with nearly two-thirds saying that Asia will present the best opportunity in 2011.
With Asian hedge funds projected to add about $40 billion to their current assets of $125, the region has attracted the likes of GLG, Soros Fund Management, Moore Capital, Maverick Capital and Viking Global Investors.
Templeton’s Mark Mobius told Reuters last week that he was considering a plan to set up a hedge fund. [ID: nTOE70J021]
High profile startups such as a $1 billion plus fund planned by Goldman Sachs’ star trader Morgan Sze and Robertson’s support for Nezu are considered a major stamp of approval for the region which is emerging as a hub for hedge funds.
“Julian Roberstson getting behind Nezu with significant assets and support certainly indicates a strong vote of confidence in that firm, but beyond that it signifies another industry giant giving a nod to the Asian hedge fund space,” said Kirby Daley, senior strategist of Newedge’s prime brokerage unit in Hong Kong. (Editing by Muralikumar Anantharaman)