Highbridge Said to Shut $1.4 Billion Asian Fund After Huttenlocher Resigns
Highbridge Capital Management LLC, the hedge-fund firm owned by JPMorgan Chase & Co., is liquidating its $1.4 billion Asia Opportunities Fund after manager Carl Huttenlocher resigned, according to two people with knowledge of the matter.
Huttenlocher, 38, also was the firm’s Asia head and managed investments in the region for Highbridge Multi-Strategy Fund, accounting for about 8 percent of the fund’s $6.5 billion in assets. He may set up his own fund after leaving New York-based Highbridge this month, said the people, who asked not to be identified because the information is private.
His departure from Highbridge comes as investors are returning to the hedge fund industry hurt by the global financial crisis. Ninety-five hedge fund startups in Asia raised $3.84 billion in assets last year, 48 percent more than 2009, according to AsiaHedge New Funds Survey.
Highbridge’s Asia Opportunities Fund raised more than $250 million of assets in 2010.
“If a fund was very associated with one manager and the clients were in it really because of him,” then it makes sense to shut a fund when the star manager leaves, said Paul Smith, chief executive officer of Hong Kong-based asset manager and hedge fund distributor Triple A Partners Ltd.
“A group like Highbridge would automatically give clients the right to redeem if the star left,” he said. “It’s just sound business practice.”
Huttenlocher declined to comment, as did Tripp Kyle, a New York-based outside spokesman for Highbridge. The news was reported earlier by the Wall Street Journal.
Highbridge, which oversees $27 billion, plans to return cash to investors in the Asia fund by the end of the month, the people said. The firm’s 25-person team in Asia will report to Alec McAree, global head of equities, and Mark Vanacore, global head of convertibles, capital structure and volatility arbitrage, as management is centralized in New York.
The firm, which has operated in Asia since opening a Tokyo office in 1994, plans to maintain its presence in the region, the people said. Glenn Dubin, Highbridge’s chief executive officer, and Chief Operating Officer Todd Builione are in Hong Kong meeting with staff, they said.
After the closure of the Asia Opportunities Fund, the people who remain in Asia will manage regional investments for the global fund, the people said.
The Eurekahedge Asia Hedge Fund Index, which tracks more than 400 funds in the region, has declined 0.5 percent this year through February, underperforming the 0.2 percent advance by the global index in the same period.
The HFRX Index returned 5.2 percent last year and the MSCI World Index gained 10 percent.
Other hedge funds in Asia have shut because of their performance. Artradis Fund Management Pte, whose hedge funds made $2.7 billion in profits for investors as markets see-sawed in 2007 and 2008, is closing down after it lost money from wagers on price swings in the last two years, according to Singapore-based co-founder Stephen Diggle.
Brummer & Partners, the largest Scandinavian hedge fund, closed its Asia-focused equity fund and the firm managing it after its performance damped returns, according to the Stockholm-based company’s annual report.
RAB Capital Plc, the London-based hedge-fund manager founded by Philip Richards and Michael Alen-Buckley, shut its remaining Asia-focused fund, said five people with knowledge of the matter last year.
Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.
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