Senrigan Capital Group Ltd. and Azentus Capital Management Ltd., two of Asia’s biggest hedge-fund startups since 2009, lost money in 2011 as the region’s funds had their second-worst performance on record, said four people familiar with the returns.
Senrigan, which manages about $1 billion and is backed by Blackstone Group LP, is estimated to have lost more than 8.5 percent last year, said two of the people with direct knowledge of the figures, who asked not to be identified because the information is private. Azentus lost 6.8 percent since it was started in April by a former Goldman Sachs Group Inc. executive, said two other people.
The MSCI Asia-Pacific Index retreated 17 percent last year, more than twice the MSCI World Index’s loss, as the European debt crisis renewed worries about a global economic slowdown, while Asian countries braced for slowing exports and rising inflation. An index tracking Asian hedge funds dropped 8.3 percent in 2011 based on preliminary data, the second-worst year since Eurekahedge Pte began compiling data in 2000.
Not all funds based in Hong Kong lost money last year. The $2.35 billion Ortus Fund (Cayman) Ltd., overseen by Ortus Capital Management Ltd., returned 5.7 percent, said two people with direct knowledge of the returns who asked not to be identified because the information is private.
“Running large assets in Asia is tough unless you are running it in liquid currency markets like Ortus has been,” said Paul Smith, chief executive officer of Hong Kong-based asset manager and hedge-fund distributor Triple A Partners Ltd. “The currency markets had more of a discernible trend in 2011 than equity markets did.”
Swings of the stock markets coupled with political interferences, such as short sale curbs in South Korea and Australia, made it difficult for larger equity-focused managers to make money, Smith added.
Katarina Bendle, who handles Senrigan’s investor relations, Roger Denby-Jones, Azentus’s chief operating officer in Hong Kong, and Janice Tang, Ortus’s head of investor relations, declined to comment.
Hong Kong-based Senrigan, founded by Nick Taylor, a former head of Citadel LLC’s principal investments business in Asia and Europe, is an event-driven fund that bets on securities affected by corporate activities such as mergers and reorganizations.
The fund made profits from “hard catalysts”, such as already announced deals, said one of the people. Still, it lost money on “soft catalysts”, such as expected mergers and acquisitions as economic and market uncertainties have weakened boardroom confidence, leading to delays of not yet announced yet possible deals, the person said.
Eurekahedge Event-Driven Hedge Fund Index, which tracks 98 funds employing the strategy globally, lost 4.6 percent last year, with 44 percent of the funds having reported December figures so far.
The Senrigan fund returned 6 percent in 2010, its first full year after trading started in November 2009, according to two of the people.
Assets of Azentus, Asia’s largest new hedge fund, founded by Morgan Sze, a former global head of Goldman Sachs’s principal strategies proprietary trading desk, dropped to just above $1.9 billion after hitting $2 billion earlier, two of the people said.
The majority of Azentus’s assets are invested in equities and equity-related options, said one of the people. The fund’s loss last year was less than half of the 16 percent decline in the MSCI Asia-Pacific Index since Azentus started trading on April 1.
Ortus Aggressive Fund, which has assets of about $776 million and takes on more leverage than Ortus’s main fund, gained 12.6 percent, the people said. Total firm assets under management jumped 62 percent from $1.9 billion at the start of 2011, the people said.