James Williams, Hedgeweek

Quantedge joins Asia’s billion dollar club… SuMI TRUST Global Asset Services strengthens Tokyo operation…

SuMi TRUST Global Asset Services, a provider of operational and administration support services to institutional asset managers, announced this week that it had completed the enhancement of its Asian business. This is in line with the organisation’s ambition to focus on three global hubs: London, New York and Tokyo.

SuMi TRUST has strengthened its operational and client service teams in all three centres with all asset servicing and client relationship activity for Japanese and Asian clients now being carried out from Tokyo, supported by the operational and administration centre in Dublin.
 
The Tokyo-based asset servicing team is composed of sales, dedicated client relationship management and experienced operations staff who have transferred from the SuMi TRUST Dublin office. They are providing significant support to SuMi TRUST’s existing and prospective fund administration clients, mainly hedge fund managers. The aim is to expand the firm’s fund administration businesses in the Asia Pacific region.
 
“We are very pleased to have completed this important phase of our global enhancement,” said Makoto Tamino, Global Head of Sales for the Asset Servicing activity. “We are always looking for ways to enhance the service we provide and we strongly believe this more streamlined approach will significantly benefit our well established and new clients across Japan and Asia as we continue to grow our business in the region.” 
 
Another firm that announced it had strengthened its Asian operations this week is Nikko Asset Management. In response to global investors’ increasing demand for multi-asset investment strategies, the firm has formed a specialist portfolio management team in Singapore.
 
The team, which currently oversees USD24bn of assets for institutional and intermediary clients, will be launching multi-asset products as well as integrated solutions for clients around the world.
 
The Tokyo-based asset manager previously had multi-asset staff in separate locations. This move will strategically consolidate its resources in order to maximize the firm’s global multi-asset capabilities.
 
“Multi-Asset is gaining a lot of attention from investors, and we are taking this action to serve growing demand across the globe,” said Yu-Ming Wang, Global Head of Investment at Nikko Asset Management. “Clients are demanding multi-asset funds as well as tailored solutions to maneuver through volatile markets to reach their investment targets. To meet these needs, we’ve brought together a highly specialized team in the same location to reach critical mass. We recognize Singapore as our centre of excellence for Asia, and as a central hub we will be strengthening our investment capabilities further in this region, and elsewhere as the opportunities arise.”
 
Al Clark, who was appointed as Global Head of Multi-Asset in March, will lead the 18-member team. Clark has over 20 years’ experience in trading and portfolio management. Before joining Nikko Asset Management Clark spent seven years in Singapore as Head of Multi-Asset for Asia Pacific at Schroder Investment Management.
 
Total assets invested in the Asian hedge fund industry reached USD116.7bn at the end of Q2 this year according to the latest Hedge Fund Research Asian Hedge Fund industry report. Asian hedge funds saw their capital increase by USD2.6bn in Q2 – the third consecutive quarterly record - largely as a result of performance-based gains. The HFRX India Index, for example, made gains of +18.5 per cent for Q2. India-focused hedge funds are now up +26.7 per cent YTD.
 
Japan funds are up 2.1 per cent YTD following strong gains of +1.42 per cent last month.
 
But despite the capital increase, net capital inflows declined relative to Q1 2014 and Q2 2013. Due to outflows in Asian equity hedge strategies and Emerging Asian regions, which offset inflows into Asian event driven and relative value arbitrage strategies, the overall net inflow total for Q214 was USD162mn. Asia’s hedge fund market remains surprisingly small relative to the global hedge fund industry, which now stands at approximately USD2.8tn.
 
“Following moderate performance in most regional Asian markets through early 2014, Asian hedge fund performance accelerated in recent months with funds in China, India, Korea and Japan producing industry leading gains through mid-year,” said Kenneth J. Heinz, president of HFR.
 
Singapore-based Quantedge Capital Pte has become not only one of Asia’s best performing hedge funds but also one of the region’s biggest. As reported by Bloomberg News this week, the firm’s flagship Quantedge Global Fund has seen its asset grow to more than USD1bn having started with just USD3mn in October 2006. On that basis, it is one of the few truly successful funds to emerge out of Asia and join the billion dollar club.
 
Since inception the global macro fund has delivered annualized returns of 33 per cent and has already generated +36 per cent through July. By comparison, the Eurekahedge Macro Hedge Fund Index returned +0.5 per cent. Quantedge uses proprietary statistical models to trade and according to one of Eurekahedge’s analysts, this has enabled the firm to take higher risks than most of their competitors.  

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