Nobody thinks that the hedge fund industry in Asia is in stellar shape, not after a year in which some 170 funds across the region closed, according to Eurekahedge, a Singapore-based research firm. Yet 90 funds opened there in 2008, and many came on the scene after the economy hit the skids.
Much of the action is based in the city-state of Singapore, where Four Elements Capital started up on December 12 with the launch of Earth Element Fund, an $8 million long-short commodities fund.
Four Elements is led by CIO Lionel Semonin, an ex–managing director at BNP Paribas. Five of the firm’s founders are former U.K.-based commodities brokers, and all have moved to Singapore, drawn largely by the dynamism of the region, says Leila Kuhlenthal, who oversees investor relations and sums up part of the appeal in four words: “The infrastructure is excellent.”
Artradis Fund Management ($4 billion in assets) remains foremost among Singapore’s hedge funds after a terrific year, especially considering that the average Asian hedge fund, by most reports, lost about one third of its value. Artradis’s flagship $2.4 billion AB2 Fund was up 35 percent, doing well off a strategy the firm says is “long on volatility, neutral in markets.”
Artradis’s $1.8 billion Barracuda Fund, which is similar to AB2, was up 27 percent last year. The firm’s founders — Stephen Diggle and Richard Magides — have worked to maintain a streamlined operation. Although they made some new hires in 2008, the latest head count is still only 32, up from 26 a year ago, according to Rebecca Walters, an aide to Artradis managing director Julian Ings-Chambers.
The firm has begun this year auspiciously, with a 2.78 percent first-quarter gain on Barracuda and a 1.38 percent return on AB2 — less spectacular performances than either fund saw last year, but that’s because lower volatility has given the funds less momentum.
Meantime, Mark Fuchs, former head of equities in Southeast Asia for Credit Suisse, is launching a Singapore-based long-short vehicle, the SEA Crest Fund. The fund, Fuchs says, will specialize in blue-chip large-cap stocks.
