Tristan Edwards, a former trader at Brevan Howard Asset Management LLP, has raised seed investment for a hedge fund in Singapore that will invest in Asian stocks based on a short-term trading strategy.
Mosaic Asset Management Pte will start running the strategy on March 1 with about $100 million, part of which is from a joint venture of Woori Absolute Partners and NewAlpha Asset Management to invest in startup hedge funds, said Edward Moon, chief investment officer of Woori Absolute.
Mosaic is setting up after hedge-fund closures in Asia exceeded starts in all but one quarter last year as assets go to larger, well-established managers, according to Eurekahedge Pte. The average size at the start for Asian hedge funds in 2012 was $70 million, Eurekahedge said.
“Being able to leverage the experience of Woori and NewAlpha is a tremendous asset, particularly in the early stage of our fund’s growth,” Edwards said in an e-mail.
Mosaic is the first investment for Woori Absolute, a Singapore-based alternative investment platform of South Korea’s Woori Investment & Securities, and NewAlpha, a Paris-based company specializing in seeding emerging managers. The venture was established in November to meet growing demand to allocate money to Asian funds.
The partnership currently has $50 million in committed capital and plans to put a total of $200 million into Asian startups, Moon said.
The Mosaic Trading Fund will employ a so-called market neutral strategy to profit from both rising and falling prices in Asia’s most liquid stock markets, Moon said.
“After more than two years of difficult trading conditions in Asia, we are seeing stock correlations coming down, and liquidity improving,” Edwards said in the e-mail. “This lends itself well to strategies that focus on stock picking.”
Mosaic is in the process of receiving an allocation from a North American institutional investor through a managed account, Woori and NewAlpha said in an e-mailed statement, without naming the investor.
The Eurekahedge Asian Hedge Fund Index gained 9.8 percent in 2012, the best performance since 2009, according to figures from the Singapore-based data provider. Total assets under management reached $127.4 billion, about 28 percent below the level in 2007, before the global financial crisis, according to Eurekahedge.
Edwards spent three years in London at Brevan Howard, Europe’s second-largest hedge fund, where he last served as the head of execution desk before joining Trafalgar Capital as a fund manager managing the Asian equity portfolio from 2007 to 2010. Prior to that, he worked at Goldman Sachs Asset Management in Melbourne as an equity analyst and a trader.
He is joined by Chief Operating Officer Greg Laughlin, who used to be a director in the prime services business at Credit Suisse Group AG, said Moon.
“The quality of managers is rising in Asia,” said Moon in an interview in Singapore yesterday. “It’s a great time to identify these managers and select some of the best-of-breeds.”
Mosaic plans to hire more traders to be based in the region and cover different countries as assets increase, Moon said. Woori and NewAlpha, which screened more than 160 funds for their first investment over the past year, will provide assistance with fundraising in Europe as well as in Asia, NewAlpha’s Chief Executive Officer Antoine Rolland said in the same interview.
“There aren’t many competitors in the region for these kind of strategy that is trading oriented,” said Rolland, adding that appetite to invest in Asia is growing in Europe.