Over the course of this week we are announcing the winners of PensionsAsia magazine’s 2002 Awards of Achievement, honouring fund managers, consultants, hedge fund managers, fund administrators, securities lenders and prime brokers which lead the industry.
Today we honour hedge fund managers across strategies, with awards for Japan and Asia long/short strategies, for all strategies and for best start-up fund.
Strategy: Japan long/short
Whitney New Japan Fund
With the backing of one of the biggest and oldest US private equity firms, Whitney’s Japan long/short fund is almost the largest in the country and certainly one of the most successful. Being based in Tokyo gives the fund’s managers – Ed Brogan, Eric Forday and Masahiro Koshiba – a distinct advantage over those based in the US or Europe. A Tokyo address makes it easier for them to conduct extensive company visits and execute the fund’s ethos of being driven by fundamentals as well as market anomalies. Launched in October 2000, the $500 million fund has achieved an annualized return of 14.6%, just under its stated annual target of 15% risk-adjusted. The fund’s managers have a combined 37 years experience in the Japanese equity markets.
Strategy: Asia long/short
WF Asia Fund
The darlings of Asia’s hedge fund community last year, Scobie Ward and Peter Ferry achieved a 20.1% return in 2001, their first year in the market. The pair left Hong Kong-based Lloyd George Management in September 2000 and began trading the pan-Asian markets with initial capital of $18.5 million. Since then the WF Asia Fund has grown to just under $180 million with an investor roster containing some of the biggest institutions in the US. Ward and Ferry follow the Jones model with a long bias focusing on stocks with strong return on equity and free cash flow characteristics. Aside from its stellar returns, the fund has an enviable Sharpe ratio of 2.31 (a risk-adjusted calculation measuring reward per unit of risk).
Best start-up
Hidaro Fund
The manager of 2001’s brightest hedge fund newcomer shares his name with the author of the controversial Webb-site who dresses down Hong Kong’s top corporate executives for their dirty dealings. But this David Webb is legendary for different reasons. Investors like his long/short Japan strategy, his 10.9% annualized return and his conscientious approach to researching companies. For these reasons they have pumped $50 million into the fund since its inception in February 2001.The Hidaro Fund is the public vehicle of Wellam Investment which Webb manages from Hong Kong along with Hitomi Sugino. Both are ex-Chase Asset Management with a combined 28 years experience in Asian and Japanese equities. The fund has no stated long bias and has gone net short in the past – the likely key to its success in Japan’s poor performing markets.
All Strategies
LIM Asia Arbitrage Fund
George Long, the man behind this arbitrage fund, has been around longer than most, launching back in 1996. Long has thrived amid volatility provided by the Asian currency crisis, the technology bubble and the short-lived global slowdown. He uses more than one strategy including relative-value convertible bond arbitrage, event-driven merger arbitrage and market-neutral index arbitrage, though the bulk of his investments are currently in convertible bonds. Since inception the LIM fund has risen 72.2% with an annualized return of 9.3%. A regular fixture in the hedge fund scene, Long set up the Hong Kong/China chapter of the Alternative Investment Management Association which now has about 40 members.
All strategies
CoreVest Fund
Korea has a volatile and liquid equity market – the perfect Petri dish for a Korea-only long/short hedge fund. CoreVest has an uncanny knack of taking advantage of the anomalies presented by an imperfect market, a skill that has helped it achieve an annualized return of 59.3% and a 320% rise in NAV since inception in December 1998. Results like these are why investors buy hedge funds but good luck if you want to invest – CoreVest’s $180 million fund is closed. Chief investment officer Paik Kyung-Hwa runs the fund with 19 years experience including a stint as head trader for Peregrine Securities in Seoul. The fund has a long bias, with as many as 40 or its 50 positions trading long at any point in time.
All strategies
ADM Galleus Fund
ADM Galleus Fund is the Mauritius-registered distressed debt hedge fund vehicle of Asia Debt Management (ADM). The $32 million fund is only part of a broad $400 million investment programme managed by a team of partners led by Chris Botsford and Robert Appleby. Some say there is not one piece of distressed debt in Asia that ADM does not have an interest in. Not surprisingly, the Galleus Fund holds a lot of its assets in Indonesia and Thailand where most companies are undergoing some sort of debt restructuring. Botsford and Appleby stay at the liquid end of the distressed market, giving investors comfort in monthly NAV calculations. Galleus returned 16% in 2001 and has achieved an annualized return of 15.3% since its April 1999 inception.
Tomorrow we will announce the winners of our Communications Awards, jointly sponsored with the Hong Kong Retirement Schemes Association, as well as awards for fund administration, securities lending and prime brokerage.
Awards are based on a combination of data supplied by Bank of Bermuda, Eureka Asia Hedge, Watson Wyatt and William M Mercer; by applications from nominees; and by the judgement of PensionsAsia’s editorial team. Decisions are solely those of PensionsAsia and are final.
