Local hedge funds battered, but two thrive amid the wreckage
Interest from US institutions not hit by crisis offers hope
By SIOW LI SEN
(SINGAPORE) While two hedge funds among the handful of Singapore’s home-grown fund managers playing in the big league stand out for their astounding successes, the others have been badly hit by the mauling of the stock markets and redemptions from anxious investors.
But there is a glimmer of hope, say fund industry insiders - interest from US institutions not burnt by the financial crisis is stirring again as values emerge from Asia’s battered markets.
The current situation is a far cry from last year when the independent fund managers here - bursting to capacity - had to turn away fresh money from institutions in the West clamouring to invest in high-growth Asia.
Artradis and Aisling hedge funds are the only local fund houses in the big league to have gone against the tide because of their unique strategy - trading arbitrage and Asian derivatives.
But others in the billionaire dollar stable like APS Asset Management are said to have been hit hard.
Founded by fund veteran Wong Kok Hoi in 1995, APS used to be the big daddy of the local managers.
In 2006, APS was managing over US$3 billion. Its assets under management have shrunk sharply, one source told BT.
Mr Wong is travelling and could not be reached for comment.
Target Asset Management as at end-October saw its total assets under management fall some 48 per cent to US$1.6 billion from US$3 billion at the end of last year.
Arisaig Partners at end-September has assets under management of US$1.2 billion, down from US$2 billion in February, according to its website.
Teng Ngiek Lian, Target fund manager, said the financial markets meltdown has been brutal on the industry though he is getting some comfort from his institutional clients who are not only staying put but also giving him fresh money to manage.
‘We believe this is a good time to increase equity investment in Asia as the long-term risk/reward ratio is favourable. After being soft closed for the past 11/2 years, the fund is now open for investment,’ said Mr Teng.
‘My family has added US$10 million investment in the fund last month,’ he said. Total family money in the fund is about US$30 million, down from US$50 million.
From the sub-prime crisis in August 2007 until end-October 2008, Target has seen a net inflow of US$59 million (inflows of US$647 million and outflows of US$588 million).
Industry insiders say it is not surprising to hear of funds which used to manage more than US$1 billion but now have US$250 million.
‘That’s absolutely possible,’ said Yingwen Chin, head of research at GFIA, a hedge fund consultant.
‘The indices are down an average 50 per cent - so that’s just down organically - and there will also be investors taking their money back,’ said Ms Chin.
As for hedge funds based here, while many are also suffering like their long only fund peers, two stand out for their astounding success - Artradis and Aisling.
Artradis is managing over US$4 billion, doubled from a year ago, while Aisling is managing US$2 billion, up from US$1.4 billion at December, said Ms Chin.
Ms Chin said Artradis is only one of four hedge fund managers in the region that she can think of with a strategy which works on arbitrage and so is not dependent on market directions, and Asian derivatives.
‘They have very unique skill sets which require understanding of Asian derivatives which is not well developed,’ said Ms Chin.
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Local hedge funds battered, but two thrive amid the wreckage
Interest from US institutions not hit by crisis offers hope
By SIOW LI SEN
(SINGAPORE) While two hedge funds among the handful of Singapore’s home-grown fund managers playing in the big league stand out for their astounding successes, the others have been badly hit by the mauling of the stock markets and redemptions from anxious investors.
But there is a glimmer of hope, say fund industry insiders - interest from US institutions not burnt by the financial crisis is stirring again as values emerge from Asia’s battered markets.
The current situation is a far cry from last year when the independent fund managers here - bursting to capacity - had to turn away fresh money from institutions in the West clamouring to invest in high-growth Asia.
Artradis and Aisling hedge funds are the only local fund houses in the big league to have gone against the tide because of their unique strategy - trading arbitrage and Asian derivatives.
But others in the billionaire dollar stable like APS Asset Management are said to have been hit hard.
Founded by fund veteran Wong Kok Hoi in 1995, APS used to be the big daddy of the local managers.
In 2006, APS was managing over US$3 billion. Its assets under management have shrunk sharply, one source told BT.
Mr Wong is travelling and could not be reached for comment.
Target Asset Management as at end-October saw its total assets under management fall some 48 per cent to US$1.6 billion from US$3 billion at the end of last year.
Arisaig Partners at end-September has assets under management of US$1.2 billion, down from US$2 billion in February, according to its website.
Teng Ngiek Lian, Target fund manager, said the financial markets meltdown has been brutal on the industry though he is getting some comfort from his institutional clients who are not only staying put but also giving him fresh money to manage.
‘We believe this is a good time to increase equity investment in Asia as the long-term risk/reward ratio is favourable. After being soft closed for the past 11/2 years, the fund is now open for investment,’ said Mr Teng.
‘My family has added US$10 million investment in the fund last month,’ he said. Total family money in the fund is about US$30 million, down from US$50 million.
From the sub-prime crisis in August 2007 until end-October 2008, Target has seen a net inflow of US$59 million (inflows of US$647 million and outflows of US$588 million).
Industry insiders say it is not surprising to hear of funds which used to manage more than US$1 billion but now have US$250 million.
‘That’s absolutely possible,’ said Yingwen Chin, head of research at GFIA, a hedge fund consultant.
‘The indices are down an average 50 per cent - so that’s just down organically - and there will also be investors taking their money back,’ said Ms Chin.
As for hedge funds based here, while many are also suffering like their long only fund peers, two stand out for their astounding success - Artradis and Aisling.
Artradis is managing over US$4 billion, doubled from a year ago, while Aisling is managing US$2 billion, up from US$1.4 billion at December, said Ms Chin.
Ms Chin said Artradis is only one of four hedge fund managers in the region that she can think of with a strategy which works on arbitrage and so is not dependent on market directions, and Asian derivatives.
‘They have very unique skill sets which require understanding of Asian derivatives which is not well developed,’ said Ms Chin.
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