Global regulation drives fund managers to strengthen operational controls and improve corporate governance

By James Williams – A recent industry survey that ranked Asian prime brokerages based on hedge fund AUM was both predictable and unexpected. Predictable in the sense that Goldman Sachs remains the leading broker in Asia. Unexpected in the sense that Morgan Stanley, ranked Number 2 in the survey, was only some USD420million ahead of Credit Suisse (with approximately USD19.2billion in AUM), with Deutsche Bank and UBS each gaining 10 per cent market share.

Since 2008, Goldmans and Morgan Stanley have seen their market share in the region halved as European players and the likes of Bank of America Merrill Lynch and Citi have moved aggressively to win clients. The ‘duopoly’ has become a stable of six or seven quality primes all battling for market share, illustrating that Hong Kong’s prime brokerage industry has become more competitive than ever.

Hedge Fund veteran resigns as co-head of China ECM at Deutsche Bank

Will Li is leaving Deutsche Bank after two years to return to the fund management industry, sources say. Separately, the bank has let go of two bankers in its corporate finance division as part of a headcount reduction.

(Finance Asia) Will Li, co-head of China equity capital markets (ECM) at Deutsche Bank, has resigned after almost two years with the bank. According to sources, Li plans to return to the buy-side.

Li started work in the investment banking industry in Hong Kong in 2000 and has held a variety of roles at different banks, but with a key focus on China. He is no stranger to fund management, however. Before he joined Deutsche in July 2010, Li ran his own macro hedge fund, Ocean Capital China Macro, which he started in 2009 and ran for about one-and-a-half years. The fund was awarded as the best macro hedge fund in 2010 by our sister magazine, AsianInvestor.

Asia hedge fund start-up Expedition hires ex-Sparx Bahra

May 29 (Reuters) – Hong Kong-based hedge fund startup Expedition Advisors has hired Kam Bahra, former chief executive of Sparx Asia Investment Advisors, as chief operating officer, a top executive at the firm said on Tuesday.

Craig James, Expedition’s founder and former head of Asian trading at New York-based hedge fund AM Investment Partners, confirmed the hire to Reuters.

Bahra, a former Deutsche Bank executive with more than two decades of experience in the financial sector and a well known figure in the Asian hedge fund industry, left the Hong Kong unit of Japanese money manager Sparx Group at the end of last year.

Meanwhile, Sparx Sparx Group Co. (8739), Asia’s second- largest hedge fund, widened its full-year loss as performance and asset management fees dropped amid market declines on global economic concerns, according to Bloomberg.

The asset manager reported a net loss of 4.54 billion yen ($57 million) in the 12 months ended March 31, compared with 3.7 billion yen a year earlier, the Tokyo-based company said in a statement through a stock exchange. Revenue fell 37 percent to 4.49 billion yen.

Sparx posted its second straight annual loss even after cutting employee compensation and relocating to less expensive offices in Tokyo. Assets under management dropped 20 percent to 535.4 billion yen during the year, the company said.

SOURCES:

Business Insider

Bloomberg

Reuters

Hedge Funds Looking for Some Mojo

For those looking for the bottom on the Hedge Fund market, hang in there.  The widely-followed Hennessee Hedge Fund Index fell 0.38 percent in April, compared with a decline of 0.75 percent in the S&P 500 (INDEXSP:.INX). But ValueWalk says hedge funds still badly trail the broader market index, after missing out on its first quarter rally. Equity long/short strategies were among the worst performers last month.