Former Tudor Partner Plans Asia Hedge Fund Backed by TemasekBei Hu
Allen Chu, a former partner of Paul Tudor Jones’s Tudor Investment Corp., plans to start his own hedge fund in Singapore in April, betting on rising and falling stocks in Asia.
Aventia Master Fund, of which Chu is chief investment officer, will seek as much as $250 million initially, according to an excerpt from the fund marketing document seen by Bloomberg News.
Chu will run Aventia in partnership with Dymon Asia Capital (Singapore), which manages $4.2 billion of hedge and private equity fund assets. Most of about $56 million of startup capital will come from the initial $500 million that Singapore state investment company Temasek Holdings Pte committed last year to a venture with Dymon to back hedge fund startups.
Chu is the latest example among former senior employees of global banks or asset managers who have set up hedge funds in Asia with the backing of big providers of startup capital, such as Temasek, Blackstone Group LP, KKR & Co. and Goldman Sachs Group Inc.’s money-manager arm. The funding helps the ventures to quickly get to a size that can attract money from institutions such as pension funds, endowments and foundations.
Temasek’s $500 million commitment last year went to the Dymon Asia Multistrategy Master Fund. Chu has been involved in managing some of the money in the Dymon Multistrategy Fund since May last year, according to an excerpt from the marketing document, which didn’t provide information on his investment return.
Ben Freischmidt, a Dymon managing director, declined to comment. Chu didn’t respond to a request for comment.
Chu was a managing director and partner at Tudor from 2005 to 2013, running more than $500 million of Asian investments at the peak, using long-short and event-driven strategies, according to the document. Event-driven managers seek to profit from changes in securities prices as companies go through transitions such as mergers and reorganizations.
Chu also managed Asian event-driven investments at Ken Griffin’s Citadel from 2002 to 2005 and worked for Goldman Sachs’s Principal Investment Area and investment-banking divisions, according to the excerpt from the document.
Aventia will look for opportunities among companies affected by events such as corporate turnarounds, strategic and regulatory shifts, mergers, reorganizations, large project developments and management changes, according to the document.
Institutions have dominated hedge fund inflows since the 2008 global financial crisis, preferring to cluster around larger funds. Worldwide, investors added $66.3 billion of fresh capital to managers with at least $1 billion of assets last year, while smaller firms attracted $10 billion, according to data compiled by Chicago-based Hedge Fund Research Inc.
Asia-based managers are courting strategic investors to help get their startups off the ground, and build teams and asset bases large enough to draw the attention of other institutions.
“It’s going to be critical that you get the day one size of at least around $100 million and pretty quickly, within the first year, try to get to the $150 million, $200 million level,” said Matt Pecot, Asia-Pacific head of prime services at Credit Suisse Group AG. Prime brokers provide services including lending stocks and cash to hedge funds, and linking them with potential investors.
Blackstone last year committed $200 million to Arkkan Capital Management, a special situations hedge fund founded by Hong Kong-based Jason Brown, who is a former head of Goldman Sachs’s Global Special Situations Group, a person familiar with the investment said at the time.
KKR struck a deal in September providing capital and other support to Feng Hsiung, the former regional chief of York Capital Management, people familiar with the matter said at the time. Hsiung is starting an Asian event-driven hedge fund this year, they said.