Institutional Investor's Alpha Magazine - July/August 2008 - (Page 47)

Research Center Asia Hedge Fund 25 The AsianSensations Sparx Group and Value Partners again lead the pack in Alpha’s annual ranking of the 25 biggest Asia-based hedge fund ﬁrms. But the upstarts aren’t far behind, as managers in Hong Kong and Singapore begin to catch up with the West. By Henry Scott Stokes C heah Cheng Hye, chairman and co- arbitrage strategies have done especially well, helping its founder of hedge fund ﬁrm Value Partners assets nearly quadruple during the past year, to $4.7 bilin Hong Kong, admits that his investment lion. Although Arisaig, which has a reputation as a shareperformance of late hasn’t been this bad holder activist, falls one place to No. 4, its assets doubled, since the Asian financial crisis of 1998. to almost $4.3 billion. Value Partners’ ﬁve biggest funds were down from 14 to Sparx, the Tokyo-based multistrategy powerhouse, has almost 22 percent during the ﬁrst quarter of the year, as led the Asia Hedge Fund 25 since we began compiling the credit crisis that started in the U.S. rippled through the ranking in 2006. But Sparx is in negotiations to sell markets in Asia already unsettled by the risa majority stake in its $3 billion Seoul-based Cosmo Investment Management Co., a move ing prices of oil and other commodities. The that would drop it to No. 2 behind Value good news, Cheah argues, is that for Asia, things are a lot better during the current Partners and leave it only slightly ahead of crisis than they were a decade ago. Markets Artradis. The deal, announced in early June, in the region aren’t as heavily leveraged as would cede local control of Cosmo to Seoulthey were in 1998, most Asian economies are based Lotte Group, but it hasn’t been ﬁnalized. still growing strongly, and China in particu“Nothing has been decided,” notes Masatoshi lar remains a solid bet. (Marc) Fukami, managing director and head ASIA HEDGE FUND “For the next several decades of human hisof corporate planning at Sparx. tory, China is a very good story,” The biggest Asian funds are says Cheah, 54, who tempers his only getting bigger, mirroring the Alpha’s Asia Hedge Fund Top 5 enthusiasm by reciting his valuetrend reported in Alpha’s Hedge Total capital driven principles for unearthing Fund 100 ranking (May 2008), Rank Firm ($ millions) underpriced companies. “We have which reveals that the 100 larg1 Sparx Group Co. $8,133 to be very consistent in our fundaest firms in the world control 2 Value Partners 5,900 3 Artradis Fund Mgmt 4,680 mental analysis. We don’t do short$1.35 trillion, about 75 percent of 4 Arisaig Partners 4,262 term trades. The way we do our job all hedge fund assets. Collectively, 5 Tower Investment Mgmt Co. 3,000 the Asia 25 ﬁrms had $52.2 bilis very similar to previous times.” lion in assets as of March 31, up Although Cheah’s f lagship Classic Fund has struggled this year — it lost 17.4 percent from $35.5 billion a year earlier and $22.6 billion at the in the ﬁrst quarter — the fund soared more than 41 percent start of 2006. The increase has been fueled in large part in both 2006 and 2007. Given the recent market difﬁcul- by China’s booming economy, which is expected to grow ties, Value Partners’ asset growth has been impressive. As by about 10 percent this year alone, according to the Asian of March 31, Cheah’s ﬁrm was managing $5.9 billion, up Development Bank. from $4.8 billion 12 months earlier, enabling the ﬁrm to Several of the funds on the list are relative newcomers maintain its No. 2 position in Alpha’s annual ranking of the to an industry that in Asia is relatively new itself, and ﬁve 25 biggest single-manager hedge fund ﬁrms headquartered ON THE WEB in Asia. For a second straight year, Value Partners trails only Be sure to visit www.alphamagazine.com for Sparx Group Co., which has $8.1 billion in assets. additional information on Asia’s biggest singleTwo Singapore-based firms are closing the gap: manager hedge fund families, as well as for Alpha’s Artradis Fund Management, which jumps ﬁve places to other rankings of the world’s biggest hedge funds. No. 3, and Arisaig Partners. Artradis’s market-neutral JULY/AUGUST 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 47 http://www.alphamagazine.com

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - July/August 2008

Institutional Investor's Alpha Magazine - July/August 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Mr. Big Goes Small The Good Guys: Adopt This School! Interview: Man's Great Hope Cover Story: The Gentleman Activist Strategies: The New Bankers Profile: Staying Alive Research Center: The Best of the East The Asian Sensations Alpha Bytes: Into the Light Unhedged: Commentary: Speculating on Washington

Institutional Investor's Alpha Magazine - July/August 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.