Tue, Sep 13, 2016 - Page 10 News List

Hedge fund backed by Alibaba founders tipped to close

Bloomberg

Andrew Bazarian, a former employee at billionaire investor Steven Cohen’s firm, will shut his Asia-focused hedge fund whose backers include a firm that invests money for Alibaba Group Holding Ltd (阿里巴巴) executives, people familiar with the matter said.

Bazarian opted to close Pinyin Capital Management Hong Kong Ltd’s hedge fund after it lost money this year, making it difficult to attract additional investors, and its biggest backer, Blue Pool Capital, decided to withdraw its capital, said the people, who asked not to be identified because the information is private.

Blue Pool invests money for wealthy families, including Alibaba cofounders Jack Ma (馬雲) and Joseph Tsai (蔡崇信).

Bazarian also wants to move back to the US, where his family is, the people said.

Pinyin’s losses so far this year were in the mid-teens, said one of the people, who did not elaborate on the exact returns.

The fund, which returned 42 percent in 2014, was up 0.1 percent last year, according to a marketing document seen by Bloomberg News.

Pinyin managed US$120 million at the end of February, the document said.

Bazarian’s fund, which bet on rising and falling stocks, was started in September 2014 with backing from Hong Kong-based Blue Pool. Blue Pool pledged the bulk of a US$100 million commitment to help Bazarian start the hedge fund, making it one of the larger Asia start-ups that year.

The US$2.9 trillion hedge-fund industry has come under fire this year for everything from excessive fees to lackluster returns, with investors removing the most money since the aftermath of the global financial crisis. Investors pulled an estimated US$25.2 billion from hedge funds globally in July, the biggest monthly redemption since February 2009, according to an eVestment report.

Lazard Asset Management, AMP Capital and Pine River Capital Management are among firms that have shuttered hedge funds in Asia. After the worst start to the year, Eurekahedge’s regional hedge fund gauge edged up 0.3 percent in the first eight months, against the 4.6 percent increase in the MSCI Asia-Pacific Index. Investors redeemed US$12 billion out of Asia-focused funds this year through July, reducing their assets by 11 percent, according to eVestment.

Bazarian joined Cohen’s SAC Capital Advisors in its Stamford, Connecticut, head office in 2004 and moved to Hong Kong in 2008. He managed a pool of investments betting on rising and falling stocks in Asia for SAC and was in charge of capital markets trading activities such as initial public offerings in his past two years at the firm. He befriended Alibaba vice chairman Tsai through a shared interest in developing the sport of lacrosse in Hong Kong.

In 2013 SAC pleaded guilty to securities fraud and converted into a family office called Point72 Asset Management.

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