TradecoHoldco

Killing it like a hooker in Hong Kong

Fund Info: Matchpoint Asia

Well,  looks like Raaj Shah, he of the first Och Ziff partner to get fired after the IPO fame, has bounced back, somewhat…

Sets up Matchpoint Asia with Sean Debow,  another hedge fund firee. The size of the fund USD50mm, indicates that it’s probably primarily partner’s funds. They probably put in USD20-USD30mm on their own, and got some Chinese entrepreneur to pump in USD20mm in return for a cut of management and performance fees. The problem with new fund raising these days, is that it takes at least 3 years to establish a track record as a new fund and get on the radar screens of the typical institutional investors, all of whom were badly burned in the last 18 months.

I’m still waiting for a Chinese oligarch backed fund, with money from a Chinese family and a cutthroat CIO to show up and start doing big things. I would envision something like Barakett’s Atticus Capital, where a HBS ice hockey cowboy was paired with an European playboy fund raiser. Atticus was such a play on concentration, leverage and sheer luck. No diversification of bets whatsover.

Getting back to Matchpoint, their strategies seem to be to trade whatever equities, bonds, and convertibles they can. There’s a lot of smoke on their strategies, but that’s what it’s going to boil down too.

On another note, neither Raaj nor Sean is Chinese or even North Asian, and yet they focus markets are North Asian. I always wonder why these guys think they can make it out here. Here’s a piece of advice, it you want to be the smart money in Asia, you better damn well have family connections into the oligarchies that run stuff. Or you will get you ass handed to you everytime.

Oct. 7 (Bloomberg) — Raaj Shah, an ex-partner of Och-Ziff Capital Management Group LLC, co-founded a hedge fund last month trading under-researched and mispriced Asian securities affected by events such as mergers, tax changes and forced selling.

The almost $50 million Matchpoint Asia Fund Ltd. targets annual returns of 15 percent to 17 percent without betting on market direction, Sean Debow, chief operating officer and co- founder of its adviser Matchpoint Investment Management Asia Ltd., said in an interview. Hong Kong-based Matchpoint’s nine- person team has the capacity to manage $700 million, he added.

“We see arbitrage opportunities in Australia where there are a lot of takeovers and tender offers,” Debow said yesterday. “We see a substantial number of securities that are mispriced and not as well understood in India, Taiwan and China.”

——

Shah, Matchpoint’s 34-year-old chief investment officer, spent 12 years with Och-Ziff, the New York-based hedge fund firm led by Daniel Och. He co-managed Och-Ziff’s Asian operations before leaving in December. Debow, 42, was most recently Asia research director and Asia business head of Los Angeles-based Ivory Investment Management LP.

‘Turning Point’

Och-Ziff’s then $16.4 billion OZ Master Fund lost 16 percent last year. The $2.4 billion OZ Asia Master Fund fell 31 percent, according to the annual report.

“We’re at the turning point right now in terms of the availability of talent for the hedge-fund industry in Asia,” said Charles Stucke, Chicago-based global chief investment officer of Guggenheim Investment Advisors LLC, which manages more than $50 billion of assets.

Matchpoint will use a so-called bottom-up approach to select its investments, Debow said. The bulk of its holdings will consist of listed shares of companies. About 10 percent of the assets would be listed securities incorrectly priced because of forced selling by investors, short-term changes in the issuers’ cash flows, or other types of corporate distress events, he said.

It will invest in securities whose prices are expected to be affected by “hard catalysts,” including publicly announced corporate actions such as mergers or events with a number of possible outcomes. Matchpoint will exploit mispricing of those securities before the events are completed, Debow said.

Distressed Prices

Company executives are shifting their focus from “firefighting” during the financial crisis back to growing their businesses through strategic investments amid “the calm after the storm,” Debow said.

Matchpoint will also trade securities with “soft catalysts,” meaning they will be affected by short-term changes in factors such as consumption patterns, taxation rates, regulatory environment, or costs of goods sold, he said.

A third category of investments will be securities trading at distressed prices, hit by forced selling by investors, or events such as material changes in near-term costs and selling prices of their products, Debow said.

The Matchpoint fund will focus on Hong Kong, China, Australia, Japan, Taiwan and South Korea, and to a lesser extent, India, Singapore, Indonesia and Malaysia, he said.

Och-Ziff, Ivory

Och-Ziff invested about 20 percent of the $27 billion assets under management at the end of December in Asia, according to its annual report.

The company in December cut at least 10 jobs in the region as its funds lost money amid falling markets and investor withdrawals, people said then. Shah departed that month to “do something more entrepreneurial,” Debow said.

Debow left Ivory, which decided in December to close down the Asian operations to focus on U.S. securities, he said.

He declined to give his and Shah’s earlier investment performances, saying the track records are owned by their former employers.

October 8, 2009 Posted by | Uncategorized | , , , , | 5 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

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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