Global Opportunities Group, a hedge fund with roots to Lehman Brothers Holdings Inc, is seeking to triple assets to US$1 billion next year by raising capital from outside investors for the first time.
The internal Asia-focused hedge fund now under Nomura Holdings Inc plans to start marketing to other investors in the first half next year, its Hong Kong-based head Benjamin Fuchs said in an interview on Friday. The hedge fund that was reborn when Nomura took over Lehman’s Asian assets started trading in mid-April with US$300 million capital from Japan’s biggest brokerage.
The hedge-fund industry is recovering from the worst year on record last year. Hedge-fund assets grew in the second quarter for the first time in a year, to US$1.43 trillion, Chicago-based researcher Hedge Fund Research Inc said last week. Industry assets peaked at US$1.93 trillion in June last year.
“Lots of people can make money in a bull market,” Fuchs said in the interview. “The real test of this type of business is whether you can make money cross cycles: bull market, bear market, sideways market.”
The fund pursues four strategies: convertible bonds, equity volatility, global macro and credit trading. It beat the Credit Suisse Tremont multistrategy hedge fund index’s nearly 6 percent gain between April and June, Fuchs said. He declined to give specific numbers because of the fund’s internal nature.
Global Opportunities Group chose the diverse strategies because of its team’s experience and their negative correlation to each other, allowing the fund to generate positive returns even in a falling market, he said.
Volatility funds seek to profit from price swings of securities. Global macro funds typically trade stocks, currencies, bonds, financial or commodity derivatives to take advantage of economic trends. Global Opportunities Group trades only publicly issued credit, convertible bonds, stocks and derivatives.
Convertible bond and credit trading contributed more than 70 percent of the profits so far, Fuchs said.
The fund earlier wagered on the recovery of the broader Asian high-yield bond market as spreads, or the extra returns that investors demand over Treasury bonds, narrowed, Fuchs said. More recently it shifted bets to the rebound of bank debt in Australia and Japan as concerns about the health of the financial industry ease, he said.
“In April or May, there were still a lot of questions about the financial health of banks,” said Fuchs. “But those issues have broadly been addressed through equity issuance, capital raising and government support.”
JPMorgan’s Asia high-yield bond index has rallied 33 percent this year after slumping 18 percent last year when banks and funds cut holdings amid the credit crisis that has resulted in US$1.5 trillion of writedowns and losses in the financial industry. Spreads for credit issued by Asian financial institutions remain at 524 basis points, or 5.24 percent, more than Asian credit’s 324 basis point average.
The fund’s other credit investments include high-yield bonds issued by Chinese real estate companies and resources companies in Indonesia and Australia.
Global Opportunities Group, which employs about 18 people in Hong Kong, traces its roots to Lehman’s decision in August 2007 to set up an Asian-based internal fund that trades global assets, Fuchs said. Rebuilt after Lehman’s collapse last September as a separate investment company wholly owned by Nomura, it trades primarily Asia-Pacific securities yet plans to expand into a global fund over three to five years, Fuchs said.
It hasn’t been decided whether Nomura will increase its capital in the fund when it opens to external investors, said Matthew Russell, a Hong Kong-based Nomura spokesman.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS