Ex-RBC Trader Damian Edwards Starts Asia Event-Driven Hedge FundBy
Metrica Partners to start this month with $25 million in funds
Edwards sees best opportunities in Japan, Australia, Hong Kong
Damian Edwards, a former managing director at Royal Bank of Canada, is starting an Asian event-driven hedge fund to take advantage of a surge in mergers and acquisitions in the region.
Metrica Partners Pte plans to start this month with $25 million, Edwards said in an interview in Singapore. The equity-focused fund has five staff and will invest about half its money in Japan, with the remainder split between Hong Kong and the rest of Asia, he said.
The total value of mergers and acquisitions in Asia rose 126 percent to $1.2 trillion in the five years through 2016, according to data compiled by Bloomberg, faster than the growth in North America and Europe. That’s throwing up opportunities for event-driven funds in the region, which bet on such corporate activities and restructuring.
“In the event-driven space, there are more opportunities in Asia than in any other part of the world,” Edwards said. “The main reason is that there are more firms here that have lots of cross-holdings or complex layers of listed securities which perform differently under different scenarios.”
Event-driven funds were the second-best performing strategy globally last year, returning 10 percent, according to Eurekahedge Pte. They’ve maintained that ranking this year, gaining an average 3.5 percent in the first quarter.
Edwards worked as managing director and head of event-driven trading at Royal Bank of Canada in Hong Kong from 2011 until 2016. Before that, he was with Morgan Stanley as portfolio manager at the Strategic Investment Group in Hong Kong and research analyst with the Alpha Strategies Group in Tokyo.
Edwards says he sees “a healthy flow of deals” in Japan, Australia and Hong Kong. Japan’s banking industry is consolidating, particularly the regional lenders -- many of which are unprofitable, he said. In addition, many companies are planning to buy back their listed subsidiaries, he said.
“And with the oil price recovering a bit, we are seeing ongoing mergers and acquisitions in Australia in the resources space,” he said.