UPDATE 1-Former JPMorgan execs to launch Greater China fund

* To launch fund via start-up in Hong Kong

* Amount of funds raised not disclosed (Adds more details, background)

By Samuel Shen and Helen Ding

SHANGHAI, April 30 (Reuters) - Three former executives at JPMorgan Asset Management plan to launch a Greater China hedge fund via a start-up in Hong Kong, tapping rising investor demand for Asian equities amid the global financial crisis.

"Greater China may be the first region to recover from the global economic crisis, and will certainly attract global fund flows," Lu Jun, one of the co-founders said in a telephone interview. "I think it's good timing to launch the new fund."

Lu, previously a star fund manager at JPMorgan's (JPM.N) China fund venture, has teamed up with Man Wing Chung, former head of JPMorgan's Greater China team, and Joseph Tang, who focused on Taiwan investment, to co-found JTM Capital Partners. The partners will start running a hedge fund in mid-June.

Lu declined to say how much money had been raised for the Greater China Opportunity Fund, which would use hedging strategies to reduce volatility.

China's 4 trillion yuan ($585 billion) stimulus package and a slew of encouraging data in recent weeks have lured global investors to bet that the world's third-largest economy might have bottomed out.

Asian equity funds saw $1.6 billion in inflows in the seven weeks to April 22, compared with $8.1 billion in outflows during the same period last year. Most of the money went to China-focused funds.

The Chinese government, companies and individuals have sound balance sheets and adequate cash, so the economy can weather the crisis through increased lending and consumption, Lu said.

In 2007, Lu resigned from JPMorgan's venture, China International Fund Management Co and started his own fund house Shanghai Congrong Investment Management Co.

Chung, who also worked for HSBC Asset Management HK Ltd, set up fund management firm HindSight after leaving JPMorgan.

A growing number of top bankers and fund managers from Merrill Lynch to Goldman Sachs (GS.N) are leaving big banks to start new, Asia-focused firms, as the global financial crisis crippled several western institutions.

Robert Morse, a former top executive of Citigroup (C.N) in Asia, announced on Wednesday the launch of a new financial services firm in partnership with two former colleagues after raising $1 billion.

(US$1=6.832 Yuan)