Ken Xu, a former managing director at SAC Capital Advisors and Och-Ziff Capital Management Group LLC, is considering setting up his own hedge fund in Hong Kong, said a person with knowledge of the matter.
Xu left SAC, now renamed Point72 Asset Management LP, earlier this month, said the person, who asked not to be identified as the information is private. His license with the company was removed on May 16, according to data posted on the website of Hong Kong’s Securities and Futures Commission. Jonathan Gasthalter, a spokesman for Stamford, Connecticut-based Point72 at Sard Verbinnen & Co. in New York, declined to comment. Xu also declined to comment.
Xu may join others to tap institutional demand for Asia-based talent with experience managing money for Wall Street banks and global hedge funds. Highbridge Capital Management LLC ex-Asia head Carl Huttenlocher; John Ho, who ran the Children’s Investment Fund Management UK LLP’s regional operations, and Eashwar Krishnan, former Asia head of Lone Pine Capital LLC, have raised more than $5 billion for their own funds in the last four years.
“Despite the appetite for exposure to the world’s largest emerging market, investors have often balked at the idiosyncratic fiduciary standards of mainland Chinese money managers,” said Peter Douglas, principal of Singapore-based research firm GFIA Pte, who doesn’t know Xu. “A Chinese manager whose experience was built within two major global alternative investment houses and is based in Hong Kong may reassure potential investors.”
Xu spent three years in SAC’s Hong Kong office, according to the SFC license record. He was a managing director and fund manager focused on Asia long-short equity investment at the firm, according to his LinkedIn profile.
Before that, he worked for four years at Och-Ziff Capital Management, according to the SFC record. He was a managing director and co-head of Greater China equity long-short investments before leaving in October 2010, according to his LinkedIn profile.
Investors in a Deutsche Bank AG survey conducted in December ranked India and Asia excluding Japan among the five-most difficult regions to allocate money to hedge funds.
Institutional investors’ preference for managers with past experience working for global firms and large teams helped Huttenlocher’s Myriad Asset Management Ltd. expand assets to $2.4 billion since its December 2011 inception.
SAC settled an insider-trading investigation in November, paying a $1.8 billion settlement and agreeing to no longer manage money for outside clients. The firm will turn into a family office managing founder Steven A. Cohen’s wealth, along with employee money.
Other recent SAC alumni have attracted institutional backing. Carl Vine, a former Hong Kong- and London-based SAC managing director, is partnering with Singapore-based hedge fund Dymon Asia Capital (Singapore) Pte to start a global equity long-short pool with a bias toward the Asia-Pacific region. Vine, now based in Oxford, the U.K., is the first manager on Dymon’s new hedge fund platform backed by Singapore’s state-owned investment company Temasek Holdings Pte.