Point72, Balyasny Vie for Talent in Asia Hedge-Fund Shakeoutby
Zaaba Capital hires employees in Asia after starting this year
Point72, Balyasny replenishing ranks of managers, analysts
When former Goldman Sachs Group Inc. trader Mohan Rajasooria opened a new hedge fund in February with backing from an anchor investor, he was in a position to do something that many firms can’t these days: Hire.
Rajasooria’s Hong Kong-based Zaaba Capital joins an elite group of Asian hedge fund startups such as Oxbow Capital Management (HK), Acion Partners and Pinyin Capital Management Hong Kong that are recruiting employees amid a shakeout in the business, thanks mainly to their success in attracting deep-pocketed backers. Established global firms including Balyasny Asset Management and Point72 Asset Management have also stepped up hiring, as they replenish their ranks of portfolio managers and analysts.
“Funds with stable capital feel now is a good time to source for top talent which was unavailable just one year ago," said Will Tan, a managing director at Singapore-based recruiter Principle Partners, who declined to identify any clients. "We also continue to see high-quality spin-outs in Asia as the talent pool has grown deeper in the last five years," said Tan, who estimated he last saw this much hiring activity in 2010.
The divide between the haves and have-nots in Asia’s hedge fund industry is growing amid volatile markets and rising regulatory costs to run such firms. As it becomes more difficult to post consistent returns, investors are increasingly shifting their money to the largest or most promising managers, prompting many smaller-scale firms to exit the business. More than 800 hedge funds closed globally last year, according to Eurekahedge Pte, whose data show that Asian hedge funds on average posted losses in six out of the last nine months.
Hedge fund startups that can win institutional backing have an edge in a regional industry where 79 new funds started with an average of $21.6 million last year, according to Eurekahedge data. Established firms, meanwhile, are seeing no shortage of prospective employees as analysts and traders move for loftier titles and more senior roles that may become springboards to starting their own hedge funds.
Billionaire Steven A. Cohen’s Point72 has hired two fund managers and recruited more analysts for its Asia offices as employees have departed the firm. The $11 billion family office considers Asia "extremely important," said Jonathan Gasthalter, a spokesman for Point72 at Sard Verbinnen & Co. Singapore-based analysts Joo Han Lua and Liu Xuan left after being offered fund manager roles at other firms, said two people with knowledge of the matter.
Here are some Asian hedge funds that have been hiring lately:
* Zaaba started with nine employees, said Chief Operating Officer Michael Becker, declining to disclose the firm’s assets under management. The firm hired former employees of Indus Capital Partners and Och-Ziff Capital Management for Zaaba, according to regulatory records. The firm was started by Rajasooria, who became a partner of hedge-fund firm Azentus Capital Management in 2011 after leaving Goldman Sachs, and left Azentus last year. Three startups who partnered with Hong Kong-based HS Group, including Zaaba, have raised about $1.8 billion between them, said Michael Garrow, HS Group’s chief investment officer.
* Oxbow, started last year by former TPG-Axon Capital Management partner Wesley Wong, has brought in other TPG-Axon alumni along with former employees of Eton Park Capital Management, Point72 and other hedge funds, according to regulatory records. New York-based Reservoir Capital Group is backing the erstwhile TPG-Axon partner in his new venture.
* Acion, the Hong Kong-based hedge-fund firm founded by Feng Hsiung last year, hired former employees of Aetos Capital, Gruss Capital Management, Eton Park and Abax Global Capital (Hong Kong), according to regulatory data. Hsiung had been a regional chief of York Capital Management and has an investment from KKR & Co. for his new hedge fund.
* Pinyin Capital Management, started in 2014 by Andrew Bazarian, with backing from Alibaba Group Holding Ltd. executive Joseph Tsai, now manages $125 million. This year, the firm added former Pine River Capital Management employee Fu Jia as an analyst, said Chief Operating Officer Jeb Altonaga in a telephone interview.
* Balyasny, the $9.6 billion multistrategy hedge-fund firm headquartered in Chicago, which is losing its Asia head Avinash Abraham, last year hired Eric To in Hong Kong to help recruit talent, said people with knowledge of the matter. Terrence Cheng joined Balyasny in January as a Hong Kong-based fund manager, according to regulatory data.
*Davidson Kempner Capital Management, based in New York, recruited former Och-Ziff Capital Management regional credit head Punit Patel. He started as a senior Asia credit investment professional in Hong Kong late last year, according to regulatory data and his LinkedIn profile.
*Hutchin Hill Capital, the $4 billion U.S. hedge fund firm, added Naveen Chandramohan as a Hong Kong-based fund manager in January after opening an office in the city last year, according to regulatory data.
Those going down the path of starting their own hedge funds have some successful examples to look up to. Former Lone Pine Capital Asia head Eashwar Krishnan amassed just under $3.9 billion by the end of last year for his Hong Kong-based Tybourne Capital Management (HK), which was founded in 2012. Carl Huttenlocher, who once led Highbridge Capital Management’s Asian operations, now oversees more than $4 billion through his own hedge-fund firm started in late 2011.
"There are more funds now compared to 2008 and 2010,” said Tan. "We now have an Asian hedge fund eco-system and it continues to grow.”