UPDATE 1-Ex-Perry Asia head raises $940 mln in top Asia hedge fund launch of 2012

Thu Aug 23, 2012 8:44am IST

Related Topics

* Ex-Perry Capital Asia head hard-closes hedge fund to new investments

* About one-tenth of capital invested by partners

* Defies tough capital raising environment

* Investors have pulled net $1.7 bln from Asia hedge funds in 2012 (Adds details, background)

By Nishant Kumar

HONG KONG, Aug 23 (Reuters) - Alp Ercil, the former Asia head of New York-based Perry Capital, closed his own Asia-Pacific fund to fresh money this week after raising $940 million in the biggest hedge fund launch in the region for 2012, a source with direct knowledge of the matter said.

Ercil's success contrasts with the struggle of hedge funds to raise capital in the region, where investors have pulled a net $1.7 billion from the $125 billion industry so far this year, according to estimates by industry tracker Eurekahedge.

The Hong Kong-based fund manager leads other major Asia hedge fund start-ups such as Tybourne Capital, launched by former Asia head of hedge fund firm Lone Pine Capital Eashwar Krishnan, and Voltex, a hedge fund set up by former Nomura Holdings Inc trader Jean-Noel Payer.

Ercil launched his investment firm Asia Research & Capital Management Limited earlier this year with 18 people, including 14 from Perry Capital, which decided to shut its operations in the region in October last year to focus on the U.S. and European markets.

The private-equity style hedge fund firm, which focuses on distressed investment opportunities in credit and equities in the Asia-Pacific region, received $440 million in the first round of capital raising that ended on April 30.

Ercil, who spent more than 10 years at Perry Capital, raised an additional $500 million since then, getting close to his target of $1 billion, and told clients this week that the fund was no longer open to investments, the source said.

Bill Wong, the hedge fund's chief operating officer, declined to comment.

START-UPS

About 10 percent of the assets have come from its own partners with the rest from a concentrated group of 15 to 20 investors, the source said.

Unlike a typical hedge fund that raises capital and attempts to deploy it from the very first day, Ercil's fund would draw the capital down as and when it sees an investment opportunity, similar to private equity funds.

The three-year fund with provisions for extension will charge a management fee but performance fees will only be earned when investment gains are realised. This is a unique fee structure in the hedge fund world that aligns the fund manager's interests with those of investors.

More than 40 hedge funds have shut down this year in Asia as investors pull out of underperformers after a tough 2011, when regional funds measured by the Eurekahedge Asian Hedge Fund Index lost 8.2 percent. They are up just 1.3 percent this year.

Still, the pipeline of start-ups is improving in Asia with at least half a dozen former traders and fund managers at banks and global hedge funds aiming to start their own ventures this year.

Some are also attracting capital as investors look to re-allocate funds to experienced traders leaving proprietary desks in the wake of the "Volcker Rule", which will limit the extent to which banks can make bets with their own capital.

New Asian hedge funds raised $2 billion in the first half of the year with an average launch size of about $63 million, a survey released last week by industry tracker AsiaHedge showed. (Reporting by Nishant Kumar; Editing by Edmund Klamann)

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