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UPDATE 1-Ex-SAC Capital exec's hedge fund boosts Asian start-up pipeline
May 22, 2014 / 5:41 AM / 3 years ago

UPDATE 1-Ex-SAC Capital exec's hedge fund boosts Asian start-up pipeline

(Adds context on Asian hedge fund industry, details on fund)

By Nishant Kumar

HONG KONG, May 22 (Reuters) - A former Hong Kong-based fund manager at SAC Capital is preparing to launch his own hedge fund, people with knowledge of the matter said, boosting a strong pipeline of start-ups in Asia this year as the industry show signs of recovery.

Ken Xu left Steven A. Cohen’s firm, once one of the world’s biggest hedge funds, this month after more than three years, records with Securities and Futures Commission show.

He plans to start the long/short equity hedge fund which will be focused on the Greater China region by the end of 2014 or early next year, the people added. They did not disclose the start-up capital or the name of Xu’s firm as the plan was at an initial stage.

Asian equity hedge funds gained 18 percent last year, their best annual performance since 2009, according to data from Eurekahedge, helped by a stock market rally in Japan and bets on Chinese sectors such as technology and gaming.

The industry also added $20 billion in assets in 2013, its first growth in three years, but the assets under management are still $33 billion below its 2007 peak, according to AsiaHedge.

Xu’s firm will join start-ups like Pleiad, co-founded by former Soros executives Kenneth Lee and Michael Yoshino and Guard Capital, which was set up by two former top traders at Goldman Sachs and Noble Group.

More than 160 new hedge funds have started operations since the start of last year, according to data from Eurekahedge.

Xu, a former Goldman Sachs executive in the bank’s special situations group, will be joined by Simon Kemp, a former trader at Mount Kellett Capital, the sources said. Both men had previously worked at hedge fund Och-Ziff Capital Management.

Xu did not respond to emails seeking comment and Kemp was not immediately available to comment. The sources declined to be identified as the plans remain confidential.

Xu is among several staff who have left SAC since last year to join rivals or start their own ventures. SAC Capital Advisors hedge fund pleaded guilty to fraud charges last year as part of a $1.2 billion deal to resolve a long-running insider trading investigation.

Reporting by Nishant Kumar; Editing by Denny Thomas and Miral Fahmy

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