HONG KONG (Reuters) - Swiss fund-of-hedge-funds manager Gottex GFMN.S is buying Hong Kong-based Penjing Asset Management, a year after Gottex co-founder Max Gottschalk moved to Asia to accelerate the firm’s expansion in the region.
Penjing, which manages $434 million, will boost Gottex’s allocation to Asia hedge funds to about $800 million, Gottschalk told Reuters in an interview, making the combined business one of the biggest fund-of-hedge-funds in the region.
The acquisition, which is subject to regulatory approvals in Hong Kong, will be paid for by a combination of up to 1.75 million Gottex shares and cash over two years.
“It will immediately provide Gottex with a full suite of Asia-based products and enable us to service our global clients taking exposure to the region,” said Gottschalk, who moved to Hong Kong in early 2011 to head the fund’s Asia operations.
“At the same time, it gives us strong presence in Asia, enabling us to engage with local clients more meaningfully,” he said.
Ronnie Wu, founder and the chief investment officer of Penjing will become a senior member of Gottex’s executive committee and research committee, and will focus on investments.
The two firms will combine operations in Hong Kong, creating Gottex Penjing Asset Management with more than 20 staff.
Gottex, which managed $7.6 billion at the end of March, was founded in 1992. Global fund-of-hedge-funds are looking for alternative ways to grow as many large pension plans have started to invest directly in hedge funds.
Gottex’s Chief Executive Joachim Gottschalk told Reuters earlier this year that he saw Asia as Gottex’s main growth area, and said the company would be prepared to make acquisitions to expand in the region.
Industry tracker Eurekahedge estimates that nearly 1,300 Asia focused hedge funds are managing about $130 billion.
Editing by Richard Pullin