Scaramucci to Raise Hedge-Fund Bets in Asia With SALT
SkyBridge Capital LLC, the $6.7 billion fund of hedge funds that organizes the biggest industry event in the U.S., plans to increase investments in Asia as it kicks off its first conference in the region.
SkyBridge will seek to boost allocations to Asia-based managers to about 30 percent of total capital over the next decade, from about $250 million now, said Managing Partner Anthony Scaramucci. The Series G flagship fund, which has put money with Metacapital Management LP and Marathon Asset Management LP, is up 15.8 percent this year through Sept. 30, according to a letter to investors. That compares with the 2.8 percent advance by the Eurekahedge Fund of Funds Index.
“The future of global growth resides here in Asia,” Scaramucci, 48, said in an interview in Singapore ahead of the SkyBridge Alternatives Conference, known as SALT, starting today. “We like being early and we like going first. We’re here to establish bigger, broader relationships.”
The SALT event, being held at the Marina Bay Sands resort and casino, will host speakers including politicians Al Gore and Tony Blair, managers from Paulson & Co. and Man Group Plc, as well as former junk-bond king Michael Milken. It comes as Asian hedge funds struggle to expand assets amid Europe’s debt crisis and China’s economic slowdown.
“There is no doubt that asset raising is hard and probably the biggest challenge right now, and this is only made harder by the fact that most investments are coming from American or European investors,” said Mark Wightman, global head of alternatives strategy in Singapore at SunGard, a provider of trading, risk and accounting systems for financial firms.
Investors globally directed almost 80 percent of new capital to hedge funds overseeing more than $5 billion in the 15 months to March, according to Chicago-based Hedge Fund Research Inc. More than 60 percent of the about 1,300 Asian hedge funds tracked by Singapore-based Eurekahedge Pte oversaw $50 million or less.
More than 1,000 people from 36 countries are expected to attend the three-day conference, according to Scaramucci, known in the industry as “the Mooch.” SkyBridge has been holding the SALT conference since 2009 in Las Vegas. An event in the desert city in May attracted 2,200 people from 22 countries around the world, he said.
“The interest in attendance is suggestive of what we’ve been talking about now for three years, our whole purpose for having moved out and having a significant presence in Asia,” said Adam Levinson, the chief executive officer at Fortress Investment Group (Singapore) Pte, the local arm of the New York- based hedge fund and private-equity firm.
Levinson moved to Singapore from New York in January 2011 to lead Fortress’s Asia-specific macro-trading activities.
“There are managers out here who are compelling and are involved in markets in ways that differ meaningfully from the bulk of the hedge funds,” Levinson said.
The event coincides with a pickup in performance by Asian managers last month. The Eurekahedge Asian Hedge Fund Index returned 2.4 percent in September, the best performer among five regional indexes, based on preliminary figures. The index has returned 3.9 percent this year through September compared with the 4.3 percent advance by the global industry gauge.
“Hedge funds will be better allocations for Asian investors,” Mark Okada, co-founder and chief investment officer of Highland Capital Management LP said in a Bloomberg Television interview at the conference today. “There certainly is a growing Asian hedge-fund community that has unique alpha opportunities.” Alpha refers to the excess return funds earn over performance benchmarks such as a stock index.
Before starting SkyBridge in 2005, Scaramucci co-founded Oscar Capital Management, which he sold to Neuberger Berman LLC in 2001. He had previously worked at Goldman Sachs Group Inc. in private wealth management.
Scaramucci, who said in July he is seeking to raise as much as $500 million for an Asia-focused fund, is looking to open an office in Singapore as early as April. The company is also planning expansion in China, he said without elaborating.
His fund of hedge funds, which researches individual offerings to spread investors’ money across a variety of holdings, benefited this year from investments in U.S. residential mortgages, distressed credit and late-cycle equities, such as companies coming out of bankruptcy, Scaramucci said.
“The world is suffering temporarily from the aftermath of the global financial crisis, but, like with every cycle, we are going to hit a dramatic cycle up period for the world and I think a lot of the growth will be driven out of this region,” Scaramucci said. “In three years, I’d like to be sitting here in this lobby and we’re talking about a renaissance in the hedge-fund community in Asia based on better growth prospects.”
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