Ex-Highbridge’s Huttenlocher Aims to Raise Up to $2 Billion for Hedge Fund

Carl Huttenlocher, the former Asia head of Highbridge Capital Management LLC, aims to raise as much as $2 billion for his new hedge fund that will open to outside investors on Dec. 1.

The Myriad Opportunities Master Fund Ltd. will start with more than $300 million and plans to close by mid-2012, Huttenlocher told reporters in Hong Kong today. The fund will focus its investments on Asia-Pacific related equities, convertible and corporate bonds as well as credit and equity derivatives, according to a company statement.

Hong Kong’s Securities and Futures Commission on Nov. 25 licensed Huttenlocher’s Hong Kong-based company, Myriad Asset Management Ltd., clearing the way for one of this year’s largest hedge fund startups in Asia. Azentus Capital Management Ltd., a Hong Kong-based hedge fund set up by former Goldman Sachs Group Inc. proprietary trader Morgan Sze, has raised about $2 billion this year as investors preferred larger managers with experience of overseeing bigger sums of money.

“I want to get back to running a small company,” said Huttenlocher about his decision to start his own hedge fund. He has spent most of his career with large hedge funds, including Long Term Capital Management LP, though had had previous experience starting a company.

Huttenlocher and a family office from outside Asia plan to invest in the fund at its start and have their capital locked up for as long as four years, he said.

SFC Inquiry

The number of Asian hedge fund startups fell 45 percent in the first half to 60, according to data from Eurekahedge Pte. Most of the $18.2 billion in capital inflows since the second half of 2009 went to larger funds, the Singapore-based industry data provider said in a report in October.

Highbridge decided to liquidate the $1.5 billion-Asia Opportunities Fund after Huttenlocher resigned earlier this year, people with knowledge the matter said in March. Huttenlocher also oversaw about 8 percent of the $6.5 billion assets in the Highbridge Multi-Strategy Fund before he left.

Huttenlocher previously planned to start trading on Sept. 1 with capital from himself and investors approved by Highbridge before opening the fund to other investors in December. The SFC informed Huttenlocher on Sept. 2 that it had received a complaint, people with knowledge of the matter said at the time, declining to be identified because of the confidential nature of the inquiry.

‘Malicious Attack’

Among the allegations were that Huttenlocher disadvantaged redeeming investors when the Highbridge Asia Opportunities Fund he oversaw limited withdrawals at the height of the financial crisis in 2008 and valued hard-to-sell assets improperly.

The collapse of Lehman Brothers Holdings Inc. in September 2008 made it hard for hedge funds to sell assets to meet withdrawals. The complaint against Huttenlocher related to the practice of limiting redemptions, known as gating, delaying the licensing of one of the largest hedge fund startups expected in Asia this year, according to the people speaking in September.

The accusations were “baseless” and a “made-up malicious attack,” Huttenlocher said today.

“One benefit of actually having this delay is that the team has been working together for four months now as a team, discussing ideas,” Huttenlocher said.

Myriad is staffed with 19 people, including 10 on the investment side, he said.

Credit in Asia outside of Japan, such as in China and Southeast Asia, is one attractive investment, Huttenlocher added.

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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