Hong Kong: Hari Kumar, a founding partner of New York-based asset manager TPG-Axon Capital Management Lp, is starting his own hedge fund with $75 million (around Rs380 crore) of initial capital from him and partner Julian Snaith, said two people familiar with the plan.
LionRock Capital Pte, based in Singapore, will begin investing from 1 June with the money. The multi-strategy fund will focus on trading Asia-Pacific stocks, said the people, who declined to be identified because the information isn’t public.
LionRock may raise capital from external investors at a later date, though the timing and terms haven’t been decided, they added. Kumar and Snaith declined to comment when reached through email. Hedge fund start-ups are increasingly relying on managers’ money to take advantage of the cheapest stocks in years after a global credit crunch and record industry losses last year made investors more demanding and reluctant to gamble on new funds.
“Setting up with their own money will give them full autonomy over their investments,” said Will Tan, a Singapore-based recruiter at Principle Partners Pte. “Their pedigree and hopefully performance going forward will put them in a good position to attract more money.”
Former Goldman Sachs partner Dinakar Singh founded TPG-Axon, which oversees $14 billion in assets, in 2005 with Kumar and two other colleagues from the New York-based investment bank.
New hedge fund starts slumped to 659 globally last year, the slowest since 2000, according to Chicago-based Hedge Fund Research Inc. Of more than 1,000 hedge fund investors surveyed by Deutsche Bank AG in February, 53% said they wouldn’t allocate money to managers overseeing less than $100 million.
“Realistically, no matter what your reputation was, it’s quite hard to raise money on the street for a new venture,” said Paul Smith, Hong Kong-based director of Triple A Partners Ltd, which provides startup capital to hedge funds.
The MSCI Asia-Pacific Index is trading at close to end-2003 level after a 43% fall last year, the most in 21 years.