Splendid Asia Macro Fund, run by a former Credit Suisse Group AG (CSGN) trader, returned 20 percent this year through April as it bought Asian currencies, fixed income and equities, and sold the yen amid the European crisis.
The fund, whose trades focus on Asia, now has $60 million in assets from $40 million when it started in July, said Charlie Chan, the founder of Singapore-based Charlie Chan Capital Partners Pte. Splendid Asia has returned about 14 percent since inception through April, he said.
“We launched our fund at a good time because it was the Greek crisis, so we started off buying things as the market fell, so we managed to pick up at some good prices,” Chan, the former head of foreign exchange strategic trading at Credit Suisse, said in an interview in Singapore. “Asia will be the place to be as the European crisis will slow things down.”
The gains by the fund compare with the Eurekahedge Global Macro Hedge Fund’s 1.3 percent return this year to April and 5 percent gain by the Eurekahedge index (EHFI38:US) that tracks Asian hedge funds. Investment opportunities are in South Asian countries such as Singapore and Indonesia given their growth prospects, while concerns remain for growth in China and India, said Chan, who left the Swiss bank last year.
Shorting the Japanese currency contributed to the fund’s performance on the view that there isn’t a real economic recovery in the world’s third-biggest economy that also faces the demographic problem of a shrinking population, Chan said. “I don’t think anything good can happen in Japan,” he said.
Chan said he’s not in a hurry to increase funds under management as that may lower returns. Total estimated capital invested with Asian hedge funds was $82.1 billion at the end of 2011, according to Chicago-based Hedge Fund Research Inc.
Last year, “I don’t think anybody was ready to deploy capital,” he said. “This year, probably there are more people looking to deploy, but with the European crisis rearing its ugly head, guys who are really going to put money to work will be a bit slower.”
The number of hedge-fund startups in 2011 reached the highest since 2007 as investors and managers positioned for 2012 amid intense volatility and macroeconomic uncertainty, according to Hedge Fund Research Inc. Two hundred and sixty five macro funds started in 2011, the most since the Chicago-based company started tracking the data in 1996.
Chan said he remains cautious about growth prospects in China as the country goes through a leadership transition later this year, and India because the nation needs to further build its infrastructure.
Chan teamed up with Lam Hoi Leong and Albert Neo, former proprietary traders he worked with at Credit Suisse, to start the hedge fund after the Switzerland’s second-largest bank shut down some operations that made bets with the bank’s own money following losses related to the September 2008 bankruptcy of New York-based Lehman Brothers Holdings Inc.
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