Bloomberg News

Goldman Sachs Alumnus Sze’s Hedge Fund Is Said to Return 8%

April 22, 2013

Azentus Capital Management Ltd., led by former Goldman Sachs Group Inc. proprietary trader Morgan Sze, returned 8 percent before fees this year through yesterday, according to a person with knowledge of the matter.

Azentus’s assets stand at $1.6 billion, said the person, who declined to be identified because the information is private. Hong Kong-based Azentus manages a global multistrategy hedge fund focused on Asia. Roger Denby-Jones, Azentus’s chief operating officer, declined to comment. The Eurekahedge Multistrategy Hedge Fund Index, tracking the performances of 254 pools globally, returned 2.3 percent in the first three months.

Large hedge funds, which absorbed most of the new capital added to the industry since the 2008 global financial crisis, have been under pressure to deliver performances in a whipsawing market driven by political events. Those with at least $5 billion of assets had more than $10 billion of net inflows in the first quarter, accounting for 67 percent of the $2.4 trillion in industry assets, according to Chicago-based Hedge Fund Research Inc.

“It has become very critical for larger funds to perform,” said Stephane Pizzo, managing partner of Singapore- based hedge-fund advisory company Lotus Peak Capital Pte, without mentioning any managers’ performances. “Smaller funds have been doing better as they can be more nimble.”

Growing Assets

Azentus’s assets grew to more than $1.9 billion by July 2011, three months after starting, as it benefited from investor preference for the safety of large managers. It was ranked Asia’s seventh-largest hedge-fund company last year by trade journal Institutional Investor.

Asia hedge funds returned almost 6 percent in the first three months, outperforming global peers’ 3 percent gain, according to preliminary data from Singapore-based Eurekahedge Pte. Managers investing across the region have been helped by a more than 50 percent rally in the Nikkei 225 Stock Average (NKY) since the end of October as Japan’s Prime Minister Shinzo Abe expanded stimulus to pull the country out of 15 years of deflation.

Azentus reversed earlier losses to post a gain of almost 1 percent last year, two people with knowledge of the return said in January. Senrigan Capital Group Ltd., an Asia-focused event- driven hedge-fund manager backed by Blackstone Group LP, has seen its assets fall to $361 million from just over $1 billion in April 2011 amid difficulties to generate returns in the region’s merger market, according to an investor document.

Departing Partner

Edoma Partners LLP, led by Pierre-Henri Flamand, decided to close down after it lost money and assets shrank in “unprecedented market conditions,” he said in an e-mailed statement in November.

Sze was once jointly responsible for the Goldman Sachs principal strategies proprietary trading team with Flamand. After Flamand’s departure in March 2010 to start his own hedge fund, Sze was global head of the bank’s largest proprietary trading unit, which at its peak managed $3 billion of Asia investments, people familiar with the matter said in July 2011.

Azentus’s Partner Bruce Kirk left in March, according to a posting on the website of the city’s Securities and Futures Commission. Kirk, one of Azentus’s six founding partners who specialized in Japan investments, left on good terms, Denby- Jones said. Azentus has informed investors and brokers of his departure, he added.

Kirk didn’t immediately reply to an e-mail sent to him seeking comment on his departure.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net.

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


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