returns in brief - bloomberg.com · hedge funds asia march 8, 2017 2 returns in brief a look at...
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Wednesday
March 8, 2017
March 8, 2017
EIP Alpha Starts Asia Market-Neutral StrategyBy Klaus WilleEIP Alpha, a Hong Kong-based $406 million asset manager, has started a new version of an Asia-focused market neutral fund that it wound down late last year.
The new $47 million EIP Asian Multi-Strategy Fund has an expanded investment mandate that will allow it to invest in Japan and directly in China’s bond and equity markets through the firm’s qualified foreign investor quota on the mainland, EIP’s Chief Investment Officer Nicola Nicoletti said in an interview. The fund is a “repackaging” of the EIP Overlay Fund, which was closed in November because the managers wanted to add to its investment scope.
The new EIP fund targets positive returns in all kinds of markets with low volatility, Nicoletti said. The previous fund returned 6.4 percent per year since its inception in 2002, he said.
“With the development of the derivatives and borrowing markets in China, there should be plenty of opportunities for us to generate alpha in a market-neutral fashion."
Nicoletti co-manages the fund with former Jardine Fleming Group banker Tobias Bland, who founded EIP in 2001 and Christopher Edwards, who previously worked with Singapore-based hedge fund Artradis Fund Management.
Mike Millard and Adam Weinrich last month joined Segantii Capital Management as fund managers, according to Kurt Ersoy, Segantii's chief executive officer.
Millard was most recently a senior fund manager at Trafalgar Capital Management, a Hong Kong-based investment firm with offices in London, Auckland and Sydney. He also worked for investment banks including UBS Group AG and Credit Suisse Group AG, according to his LinkedIn profile.
Weinrich was once director of research and a fund manager in the Hong Kong office of Hutchin Hill Capital. The New York-based hedge fund led by Neil Chriss decided to shut its then 19-month-old Hong Kong office in October to focus on the U.S. market and after the pan-Asian event-driven strategy housed in the office had only been "modestly profitable."
Stephan Wenger this month rejoined Balyasny Asset Management as a Hong Kong-based macro fund manager, said a person with knowledge of the matter, who asked not to be identified as the information is private. Wenger was a fund manager for Balyasny in New York and Hong Kong between 2010 and 2012, according to his LinkedIn profile. In between, he worked for Bank of America Corp.'s Merrill Lynch unit and was most recently Hong Kong-based macro portfolio manager and head of Asia macro trading for Noble Group Ltd., the Singapore-listed commodity trader.
— Bei Hu and Nishant Kumar
Segantii, Balyasny Hires
Quote of the Week
"This will have far-reaching impacts, including lower beer sales, as Generation Y gravitate towards the 'low carb' alternate."— Ben Cleary, co-manager of Tribeca Global
Natural Resources Fund, on the growing
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Inside
Returns in BriefMost February numbers are positive for early-reporting Asia-focused hedge funds.
Market CallsGriffin Asset Management likes the shares of DCB Bank and SpiceJet.
Market Calls, RevisitedA Bangkok-based hedge fund firm last March was bullish on shares of Ramayana Lestari Sentosa Tbk, a Jakarta-based clothing retailer.
13F ForensicsHedge funds increased holdings of Chinese companies' American Depositary Receipts in the fourth quarter.
Returns in Brief
Nicola Nicoletti
Hedge Funds Asia 2 March 8, 2017
Returns in Brief
A look at Asia-focused hedge fund performance in February and year-to-date. Funds in the table below that are not mentioned in the accompanying text were reported in past issues of the Brief or in Bloomberg News stories, which may be accessed on the terminal.
Manas Asian Equities Value Fund rose 2.4 percent in February and is up 8 percent in the first two months of 2016, according to founder Anuj Sehgal. Hong Kong-based 's long-Manas Capitalbiased fund has gained 6.1 percent on average each year since it started trading in March 2012, Sehgal said in an email on March 1. The fund's top five contributors so far this year are Indian companies V-mart Retail Ltd., Kajaria Ceramics Ltd., AIA Engineering Ltd. and Bajaj Electricals Ltd., and Hong Kong-listed Chow Tai Fook Jewellery Group, he said. Sehgal previously worked at JPMorgan Chase & Co., Nomura Holdings Inc. and North of South Capital in Hong Kong.
's Yong Rong Asset Managementlong-short multistrategy fund fell 0.4 percent in February and is up 5.9 percent so far this year, according to an investor letter seen by Bloomberg News. Founder Yong Huang is the chief investment officer at the firm which has offices in Hong Kong and Shenzhen. Yong Rong Global Excellence Fund invests in equities and equity derivatives, as well as indices, commodities and currencies, and has gained 20 percent annualized since it started trading in July 2012, the letter said. The $177 million fund invests in companies listed in Hong Kong, China and the U.S. as well as American Depository Receipts, according to Rachel Deng, who works in the firm's investor relations department. It fell 24 percent last year caused by the "broad market dip" at the start of the year and "hedges added on, including positions on index and index futures, which prevented performance from bouncing back from the low," in 2016, Deng said in an email dated March 7. Yong Rong Asset Management manages $216 million across three funds. Huang, who previously worked at Huatai Financial Holdings, founded the firm in 2011.
— Suzy Waite
Market Calls
January Returns
Year-to-Date Returns Through Feb. 28
Hedge Funds Asia 3 March 8, 2017
Market Calls
India-Focused Fund Likes DCB, SpiceJet Griffin AssetManagement, a Hong Kong-based firm that manages a long-short fund focused on Indian equities, is bullish on shares of DCB Bank Ltd. and budget airline SpiceJet Ltd.
Griffin India Equity Fund began trading on Jan. 27 in Hong Kong and gained 2.2 percent in February, with long investments in both companies contributing to the fund's performance last month, according to Ambar Taneja, co-founder and CIO.
During the non-performing loan crisis in 2009 and 2010, DCB Bank's management focused on mortgages and retail loans as opposed to "chasing large corporate loans which in hindsight, have proved to be costly for so many Indian banks," Taneja said in a telephone call on March 2. "They've also hired sensibly and have long-term investors who help with regular capital infusions regularly." DCB Bank rose 32 percent last year and is up 43 percent so far this year.
SpiceJet meanwhile has recently renegotiated contracts with its suppliers, from aircraft manufactures to engine leasing companies to small vendors for maintenance items, a cost-saving exercise that will help the company's earnings going forward, he said. SpiceJet has also benefited from low oil prices and government subsidies. The company'sshares fell 24 percent in 2016 but are up
percent so far this year through March 327.
Griffin India Equity Fund shorts via futures but is predominately long-biased.
"After the first 100 companies, we focus on the next 200," Taneja said. "The reason is simple. In a market like India, you have a lot of money coming from allocators — like mutual funds and ETFs — not stock pickers. As a result, the top 100 companies have consistently traded
Market Calls, Revisited
By Suzy Waite NTAsset (Thailand), a Bangkok-based hedge fund firm, last March was bullish on shares of Ramayana Lestari Sentosa Tbk, a Jakarta-based clothing retailer. Consumer sentiment was improving in Indonesia and the company, which focuses on the mid-to-low mass market, was benefiting from subsidy distributions by the government, an investor letter said at the time.
Ramayana Lestari's share price is up 43 percent since March 1, 2016, compared with a 13 percent rise in the Jakarta Stock Exchange Composite Index. "We remain invested in Ramayana and believe it is undergoing a long-term turnaround and continue to believe in the long-term potential for the company," Kenneth Ng, the firm's chief executive officer, said in an email on March 4. The NTAsian Discovery Fund, which manages $658 million, rose 11 percent last year and is up 2.6 percent so far this year through Feb. 28.
above what we think are reasonable valuations and companies below are ignored."
Taneja and CEO Nitin Birla started Griffin Asset Management in July and received its Type-9 license from Hong Kong's Securities and Futures Commission in December. Taneja was previously a senior associate director at Standard Chartered Bank in Hong Kong and before that worked at Bank of China International as a director in its wealth management unit, according to his LinkedIn profile. He previously started his own firm in New Delhi called Abacus Advisory Services and managed a long-only fund.
Birla also worked at Standard Chartered and Bank of China International, as well as Barclays, Citibank and Coutts & Co.
— Suzy Waite
Traders are so confident that Prime Minister Narendra Modi’s party will win a key state election that they are feeling little need to hedge against another outcome.
The NSE Nifty 50 Index has rallied to within a whisker of its life-time high amid the lowest price swings in about six months, as data showed Asia’s third-largest economy is recovering from Modi’s shock cash ban. The cost of put options tied to the gauge relative to calls is the lowest since October.
Read more .here— Santanu Chakraborty
Traders Shun Hedges Before India Vote
13F Forensics
Ambar Taneja (top) and Nitin Birla
Hedge Funds Asia 4 March 8, 2017
13F Forensics
Hedge Funds Added JD.com, Cut Alibaba Ahead of Chinese ADR RallyBy Taylor Hall and Jenn ZhaoHedge funds increased holdings of U.S.-listed Chinese companies in the fourth quarter, putting them in a position to benefit from a rally that's seen gains more than triple those of the S&P 500 Index.
Buyers last quarter were led by Chase Coleman's Tiger Global Management, which raised its stake in online retailer JD.com Inc. and took positions in TAL Education Group and New Oriental Education & Technology Group Inc., according to data compiled by Bloomberg. Lone Pine Capital upped its wager on e-commerce giant Alibaba Group Holding Ltd. Rob Citrone's Discovery Capital Management was the biggest U.S. hedge-fund seller, ditching Alibaba, search-engine operator Baidu Inc. and Ctrip.com International Ltd.
The 15 largest China ADRs by market cap have gained 22 percent on average in 2017, compared with 6.4 percent for the Standard & Poor's 500 Index.
Among the key trends from the latest round of earnings releases and filings showing hedge-fund holdings data as of Dec. 31:
Hedge funds mostly exited or reduced their Alibaba positions, including Eton Park Capital Management, Citadel Advisors and Third Point. Even Tiger Global, still one of Alibaba's top hedge-fund holders, scaled back. Hedge-fund managers cut an aggregate 6.35 million positions in Alibaba valued at $1.66 billion last quarter, according to data compiled by Bloomberg.
Alibaba was once an industry darling, with Dan Loeb's Third Point among those disclosing sizable stakes following the company's $25 billion initial public offering in September 2014. Hedge-fund positions
Alibaba
fell to $4.97 billion as of Dec. 31 from $14 billion shortly after the IPO.Other firms saw a buying opportunity as the KraneShares CSI China Internet exchange-traded fund, which holds dozens of stocks such as Alibaba and Baidu, fell 16 percent — its worst performance in more than a year.
Among the bulls, Alibaba was a new buy at quant-driven Renaissance Technologies, while Stephen Mandel's Lone Pine increased its position by almost a third. Philippe Laffont's Coatue Management, known for betting on technology stocks, also added to its stake, as did OZ Management and Balyasny Asset Management.
Hangzhou-based Alibaba's stock is up 18 percent this year in U.S. trading.
Some funds that cut Alibaba positions also sold Baidu and online travel company Ctrip.com. Citadel and Indus Capital Partners both trimmed holdings in all three of those stocks, while Discovery exited positions in them.
Och-Ziff Capital Management Group LLC's OZ arm sold off its $163 million stake in Ctrip while increasing investments in Alibaba and JD.com and making NetEase Inc. a new buy.
Ctrip, China's largest travel website, named Jane Sun as chief executive officer during the quarter and completed its largest-ever acquisition, a $1.7 billion deal for U.K. startup Skyscanner Holdings Ltd. The Shanghai company's ADRs have rallied this year but are still well off their late-2015 peak.
Hedge funds piled into JD.com, Alibaba's largest competitor in the Chinese online shopping market, more
Baidu, Ctrip
than any other ADR. They increased their combined holdings 35 percent to 153.9 million shares, valued at $3.92 billion as of year-end.
Tiger Global, Coatue and Andreas Halvorsen's Viking Global Investors were among firms adding to their positions in Beijing-based JD, which has invested heavily in fixed assets such as warehouses and delivery trucks to ensure good service and facilitate the buying and selling of everything from electrical goods to boxes of kiwi fruit.
On Thursday, JD reported fourth quarter revenue that beat analysts' estimates, fueled by strong holiday sales. The company also outlined a plan to sell and spin off its finance business for $2.1 billion in cash, a step that may help make the e-commerce operator more attractive to investors amid fierce competition.
Funds were also net buyers of game and website operator NetEase, with Tiger Global, Renaissance and Citadel initiating or adding to stakes while Izzy Englander's Millennium Management cut back. NetEase has surged more than 30 percent in U.S. trading this year and reached a record high Feb. 28 as mobile gaming powers profit growth.
Weibo Corp., the fast-growing Chinese-language social media company, attracted new investments from Citadel and Dmitry Balyasny's namesake firm, while Millennium more than doubled its holding. Meanwhile, Tiger Pacific Capital, Jericho Capital Asset Management and Moore Capital Management sold off their stakes. The U.S.-traded shares are up 24 percent this year even after plunging 16 percent on Feb. 23, the worst one-day drop since August 2015, as earnings growth failed to wow investors.
— With assistance from Gilbert Xu
and Wendy Huang.
Calendar
Hedge Funds Asia 5 March 8, 2017
Calendar
DATE ORGANIZER(S) EVENT SPEAKERS/DETAILS/ATTENDEES OF NOTE LOCATION
March 14-15 UnicomAI, Machine Learning and Sentiment Analysis Applied to Finance
"The conference addresses and explains how to extract sentiment from these multiple sources of information and showcases the advances that have taken place in the field of financial innovation."
Hong Kong
March 15 Varengold Capital Hedge Fund Startup RoundtableReggie Yau, Varengold. Networking and update on developments in the industry.
Hong Kong
March 21-23 WB Research TradeTech FX AsiaKewei Yang, Graticule Asset Management; , Lion William GohGlobal Investors; , Nikko Asset Management. Woon Khien Chia
Singapore
March 28 Bloomberg Entity Exchange Launch CelebrationDocumentation requirements for investment managers and broker counterparties. E-mail [email protected] for more information.
Hong Kong
April 11-12 Futures & Options World Derivatives World AsiaGovert Heijboer, True Partner; , RCMA Asset Michael ColemanManagement; , Efficient Capital; , Phillip Ernest Jaffarian Linus LimCapital; Rocky Hu, Olympus Hedge Fund Investments.
Hong Kong
April 20 Bloomberg Family Office Forum 2017 Available to attendees. Hong Kong
April 20-21 Altinvestor APAC 2017"...the only one of its kind ever produced to feature both family offices as well as institutional investors on a programme with a focus on Alternative Investments."
Singapore
April 24-26 Informa FundForum AsiaMisha Graboi, Paamco; , Mirae Asset Global Jung -Ho RheeInvestments (HK); , Prime Capital; , Jack Ling Andreas VogelsangerAsia Frontier Capital (Vietnam); , Arete Financial.Vineet Vohra
Hong Kong
May 15-16 Deutsche BankCapital Introduction and dbAccess Asia Conference 2017
"Over 60 Asia focused hedge fund managers from across the globe."
Singapore
May 18 Alternatives Summit Korea Hedge Fund & Multi-Asset Summit To be announced. Seoul
May 26 Eurekahedge Asian Hedge Fund Awards 2017 To commemorate the top-performing Asian hedge funds of 2016. Singapore
June 7 Karen Leung Foundation Sohn Conference Hong Kong Agenda, speakers to be announced. Hong KongDISCLAIMER: The information on this page was compiled by Bloomberg from multiple sources, public and private, and is deemed to be accurate, but not definitive or exhaustive. Questions about events should be addressed to the event organizer.
The "organizer" and "event" columns link to websites, where available. Names link to the individual's BIO page, where available, on the Bloomberg terminal. This functionality may be limited to terminal users viewing the Brief in Chrome browsers.
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