LionRock Capital Pte, run by a founding partner of TPG-Axon Capital Management LP, will stop seeking outside investors for its hedge fund that will focus on managing the partners’ money.
“I can confirm that LionRock will no longer be accepting external investors and will instead only manage the capital provided by the partners,” Hari Kumar, who started Singapore-based LionRock in 2009, said in a e-mailed reply to queries from Bloomberg News.
The firm’s funds under management are expected to be about $100 million and will be managed “in a long-term fundamental investing style reflective of a family office or endowment model,” he said. Kumar started the multistrategy hedge fund in 2009 with $75 million of initial capital from him and Julian Snaith, a partner, two people familiar with the plan said then.
Increased scrutiny of hedge funds and trading conditions after the collapse of Lehman Brothers Holdings Inc. in 2008 have made it difficult to raise assets, leading about 100 Asian hedge fund to close down in the 12 months through January, according to Singapore-based Eurekahedge Pte. Investment performance remains the most important factor when assessing a hedge fund manager, according to a Deutsche Bank AG annual investor survey.
“We decided that the best way to manage and compound our capital over a 10- to 20-year horizon was to create a concentrated portfolio with a long-term investing horizon,” Kumar said. “Given that this style is different from a typical long/short equity hedge fund and since this style would not be in line with what the majority of potential investors would expect, we decided that we would focus solely on our capital.”
The LionRock Master Fund has declined since it started investing in June 2009, two people with knowledge of the matter said, requiring anonymity because the information is private. The fund lost almost 9 percent this year through May, one of the people said. Kumar declined to comment on the fund’s performance.
Asia-focused multistrategy funds fell 0.2 percent in the first half of the year, according to Eurekahedge.
“We believe that we have enough critical mass with our capital to allow us to continue to run the fund with the appropriate research and operational infrastructure,” Kumar said.
Former Goldman Sachs Group Inc. partner Dinakar Singh founded New York-based hedge fund TPG-Axon with Kumar and two other colleagues from the investment bank. Prior to starting TPG-Axon, Singh set up the Asian arm of Goldman Sachs’s principal strategies group in 1998. Kumar was one of the earliest members of the Asian desk, rising to become managing director running the business in Asia outside Japan before leaving in 2004.