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Killing it like a hooker in Hong Kong

Breaking News: Temasek sets up its own hedge fund

From Bloomberg:

Seatown Holdings International will employ a multistrategy to invest in assets from stocks to bonds, targeting absolute returns, the people said, asking not to be identified because the information is private.

Charles Ong, chief strategist at Temasek, is the chief executive officer, the people said. Nasser Ahmad, co-founder of New York-based DiMaio Ahmad Capital LLC, a hedge-fund firm specializing in credit products, is the co-chief executive officer, they said.

The size of the hedge fund may be $3 billion, AsianInvestor reported on its Web Site earlier today. Temasek spokesman Jeffrey Fang declined to comment.

Sounds like they are setting up a prop desk. Word on the street is that they will still pay their people very little. Also given Temasek’s traditional top down approach, I wonder how they are ever going to get a research edge when they have a high propensity to ignore the opinions of junior people.

It also sounds like Ho Ching finally got her margin account size increased ; )

Let’s look at the principles:

Charles Ong – chief strategist at Temasek, an ex Malaysian. Former head of Lazard and Deutsche SEA IB. 41, a very young high flyer, but comparatively an underachiever compared to his brother Richard, who was promoted to head of Goldman China. He’s also the man who did the Shin Corp deal, sending Thailand into its endless coup phase.

From China Economic Review:

Now we would like to bring your attention to the curious case of Richard Ong of Goldman Sachs. Ong, a Malaysian Chinese, was not allowed his promotion to head Goldman’s Beijing joint venture, Goldman Sachs Gao Hua Securities, because he failed a government mandated Chinese-language proficiency exam.

That seems odd. Ong was co-head of investment banking in Asia and headed Goldman’s Singapore office before moving to Beijing. He was clearly well-qualified, and, at the age of 42, also on a rapid ascent up the ranks. Goldman is supposed to be the world’s most profitable investment bank, and enjoys special status in China, since it’s one of only two foreign brokerages with management control over its JVs here (the other is UBS). According to the FT, many exemptions have been given in the past to foreign executives whose Chinese wasn’t up to scratch.

..

But can we glean a clue by examining Richard Ong’s resume? According to the FT again, Ong was “instrumental” in Singapore government investment vehicle Temasek’s purchase of ousted Thai PM Thaksin Shinawatra’s Shin Corp last year. But just how instrumental was he? The Nation, a Thai paper, noted that Richard’s brother, Charles Ong, is Temasek’s head of overseas investment strategy and “right-hand man” to Temasek chief Ho Ching. According to Goldman’s website, its Singapore office counts Temasek as a “key client”.

So Charlie is a card carrying member of the Singapore elite oligarchy.

Nasser Ahmad

Nasser Ahmad is the Chief Investment Officer and Manager of DiMaio Ahmad Capital, an investment manager with its headquarters in New York.

Prior to co-founding DiMaio Ahmad Capital in 2005, Mr. Ahmad was a Managing Director of Credit Suisse Capital and the Chief Investment Officer for the Diversified Credit Hedge Fund Group.  Mr. Ahmad spent twelve years at Credit Suisse First Boston (CSFB) where he held senior positions in the Fixed Income trading division. Before moving over to Credit Suisse Capital, Mr. Ahmad ran the Global Credit trading business for CSFB.  Mr. Ahmad started his professional career at Salomon Brothers in 1992.

Mr. Ahmad is on the boards of Breakthrough for Human Rights and the Soros Economic Development Fund.  He is also a board member of the South Asian Action Forum (SAAF), a Political Action Committee (PAC) consisting of community and business leaders that promotes a progressive policy platform with key rising and established U.S. policymakers.  In addition,Mr. Ahmad is a term member of The Corporation Development Committee (CDC) of MIT which helps secure critical financial resources for the Institute.

In 2008, Mr. Ahmad joined the National Finance Committee (NFC) of the Obama presidential campaign and was appointed co-chair of the Asian American Finance committee.

Mr. Ahmad was born and raised in Pakistan.  He graduated from the Massachusetts Institute of Technology where he received a B.S. and M.S. in Electrical Engineering.

What happened to DiMaio Ahmad, well the long and short of it, is that these guys were spun out of CS during the boom era, then Dow Kim at ML (you remember the guy who was single handedly responsible for ML’s horrible credit book) took a stake in them and committed capital. They then embarked on a disastrous strategy of buying high yield notes yielding 10%, levering it up 4-5 times at 6% in order to get a return in the mid teens. They got slaughtered by the crisis, illiquid book, facing future cash calls, a long wind down process for investors to get back their money. Having failed, Jack Dimaio got hired to take over Morgan Stanley’s credit book, leaving everyone else to hunt for their own exits.

Speculation

I will blindly speculate that Nasser will cover all the brown countries ie Middle East, India, Pakistan and parts of South East Asia, while Charles will cover all the yellow countries ie North Asia and parts of South East Asia.  I’m not being racist or anything, but this is actually how the Singapore bureaucracy thinks.

Nasser and Charles are probably getting a share of profits, but no management fee. Few if any of the traders and analysts will get paid hedge fund money, so it will be a training ground for Temasek staff looking to exit to the private sector.

They will probably blow up and have to be bailed out by Temasek. I mean it’s such a clear moral hazard situation that I would expect them to gun the risk. You have an entity that can actually print its own money (Singapore is a hard currency) that is backing you.

Charles probably told Temasek he wanted to make some serious dough and he was thinking of setting up his own fund. Nasser wanted to be closer to his family in Pakistan, now that the parents are older and he’s done his New York thing. Asia is the place to be, so why not move out.

Anyway, will write more about these guys soon.

February 10, 2010 Posted by | Uncategorized | , , , , , , , , , , , , | 6 Comments

Citadel, Bloomberg and the perils of stale news…

Bloomberg today morning kicked off with a puff piece on Citadel, which will no doubt appear in Bloomberg magazine later in the month…

Oct. 29 (Bloomberg) — Rohit D’Souza was on vacation with his family in India in May 2008 when he got a call from Ken Griffin, founder and chief executive officer of Citadel Investment Group LLC. Griffin wanted the banker, who had just quit his job as head of equity trading and sales at Merrill Lynch & Co., to help him do something no other hedge fund had ever tried.

Less than two months earlier, Bear Stearns Cos. had disappeared, swallowed by JPMorgan Chase & Co. after losing billions on subprime mortgages. Griffin asked D’Souza, a 45- year-old native of Mumbai, if he would be interested in running a full-service investment bank.

6 hours later, WSJ reported the following

The Chicago firm also confirmed that a banker it hired last year to build an investment bank, Rohit D’Souza, was leaving.

The developments showcase the challenges facing the firm that manages $14 billion in assets as it tries to recover from a grim 2008 for its hedge funds while diversifying into other businesses.

Upon which, Bloomberg had to Update the article and add the following

Oct. 29 (Bloomberg) — Rohit D’Souza was on vacation with his family in India in May 2008 when he got a call from Ken Griffin, founder and chief executive officer of Citadel Investment Group LLC. Griffin wanted the banker, who had just quit his job as head of equity trading and sales at Merrill Lynch & Co., to help him do something no other hedge fund had ever tried.

Less than two months earlier, Bear Stearns Cos. had disappeared, swallowed by JPMorgan Chase & Co. after losing billions on subprime mortgages. Griffin asked D’Souza, a 45- year-old native of Mumbai, if he would be interested in running a full-service investment bank.

The two men talked through September as Lehman Brothers Holdings Inc. declared bankruptcy and rumors swirled that Chicago-based Citadel, whose gross assets had reached $145 billion earlier that year, would fail. The firm’s biggest funds, Kensington and Wellington, lost 16 percent that month and started exiting unprofitable businesses. In October, as the funds tumbled another 22 percent, D’Souza said yes. D’Souza said yes.

On Oct. 29, 12 months later, Citadel said D’Souza is leaving the firm and will be replaced by Patrik Edsparr, president of Citadel Europe and head of the company’s fixed- income business. The departure suggests that Griffin’s attempt to graft an investment bank onto a hedge fund firm won’t be easy.

Hilarious… at least Bloomberg is lucky the news wasn’t delayed a couple more days, then in would be in hardcopy in the Bloomberg magazine. However, they certainly couldn’t change the thesis of the article… that Citadel was building an investment bank, without deleting the entire piece… so they just ran with it, regardless of how irrelevant the entire story had become:

His latest enterprise may well be his most audacious, at least since starting his own hedge fund. Grafting an investment bank onto a hedge fund firm won’t be easy. Unlike large banks, Citadel doesn’t have a big balance sheet, so it can’t offer loans to clients to purchase companies or make investments.

October 30, 2009 Posted by | Uncategorized | , , , , | 3 Comments

Fund info: Och-Ziff Asia

General

Och-Ziff (NYSE:OZM) is a traded hedge fund initially seeded by the heirs to the Ziff publishing fortune and founded by Dan Och, a protege of Robert Rubin and alum of the Goldman Sachs risk arbitrage desk. Och-Ziff Asia has been around for a while, primarily trading liquid instruments and equities in Hong Kong, before they expanded their distressed business in early 2008. It was a disastrous move, and the the Asia Master Fund was down 31% in 2008. They ended up firing the entire distressed and private equity and credit section, and hiring real estate guys.

OZ has offices in Beijing, Tokyo, Hong Kong and Bangalore. It hired real estate guys for HK,  Singapore, China and India.

Deals

China Healthcare Holdings (HKSE:673):  A provider of healthcare services in China. OZM only owns 2% of the convertible shares according to news. Have to investigate further.

Fisherman’s Wharf: Stanley Ho promoted casino in Macau. Greenfield project. ML arranged a USD400mm private convertible in 2006. Looks like the CB value has crashed. Chow is offering 50 cents on the dollar or less to buyback the debt. When is this thing going to IPO given that the Macau gaming market has generally crashed? TPG was also in there…

People

Zoltan Varga: partner, head of Asia-Pacific. based in HK

Punit Patel: HK, Analyst, Ex JPM, Ex NYU Stern. Capital structure arb

Stephen Yuen: HK, Analyst, Ex GS, Wesleyan University

Manoj Jain: HK, MD, Ex-CS, Cambridge

Raaj Shah: former partner, former co-head Asia Pacific, head of credit and distressed, based in HK, former head of European credit trading

Mary Schroeder: former distressed debt head, based in HK,  joined the firm at the beginning of 2008 from Asian Debt Management.  Got axed by the end of the year. Poor woman, talk about a bad move.

Oliver Wimmer: former employee, formerly of Lehman Brothers.

Deep Mishra: Indian real estate. fired at end of 2008

View this document on Scribd

Josh Katzin: Analyst, HK, ex Mckinsey, Fenway Partners, HBS

Kirti Ram Hariharan: Analyst in Bangalore office, National Law School of India University, Partner at Amarchand Mangaldas

Zain Fancy: new hire, former head of Morgan Stanley Real Estate Asia Pacific. Zain joined Morgan Stanley in 1996. Prior to joining MSRE in 1998, he worked in the Mergers & Acquisitions Department. Zain has spent five years in the U.S. business and the remainder in Asia. Zain received a BS from Georgetown University’s School of Foreign Service.

Roy Kwok: new hire from MS

Annan Madduri: new hire from MS

Bharat Khanna: new hire from MS

Entities

April 1, 2009 Posted by | China, Hedge Fund, Hong Kong | , , , , , , , , , , , , , , , , , , , , , , | 1 Comment