July 25, 2012 / 10:22 AM / 5 years ago

Ex-Nomura trader readies $250 mln Asia vol hedge fund

HONG KONG, July 25 (Reuters) - Former Nomura Holdings Inc trader Jean-Noel Payer is preparing to launch a $250 million Asia-focused volatility hedge fund aiming to take advantage of price swings in Asian securities, in one of the biggest startups in the region this year.

Payer, 36, who was a managing director at Nomura and worked with trader Benjamin Fuchs at the bank, told Reuters that he was setting up Voltex Asia Capital Ltd in Hong Kong. His firm received regulatory clearance on Tuesday.

He declined to disclose the start-up capital but a source familiar with his plans said he had commitments worth $250 million in a managed account for investors in the United States.

This puts Voltex among the top launches in Asia so far this year, following $440 million raised by Alp Ercil, the former Asia head of Perry Capital, and $195 million gathered by former UBS Australia trader Gerard Satur for his MST Capital.

“We target to be fully operational and launch in September,” Payer said in an interview, adding that 95 percent of the fund’s assets will be invested in Asia.

The move comes as many proprietary desk traders leave banks in light of the Volcker rule that limits the extent to which banks can trade in financial markets with their own capital.

Payer, a French national who came to Hong Kong in 1999, joins the likes of Fuchs, former Goldman Sachs trader Morgan Sze, and former head of JPMorgan Chase equity derivatives group for Asia-Pacific William Lee in moving away from proprietary desks to start their own hedge funds in Asia.

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.

Some startups are attracting capital despite tough times for the $127 billion Asian hedge fund industry, which has seen net outflows in 2012 and more than 40 funds closing down, according to research firm Eurekahedge.

Payer’s hedge fund will combine volatility arbitrage and macro strategies, and will trade equity, fixed income and forex.

Volatility -- or the fear gauge -- refers to the rate of change in the price of an asset. It increases when uncertainty grows. Macro hedge funds focus on major economic trends and events and put their money wherever they see value.

Payer, a sailing enthusiast, ran the volatility trading team for Fuchs, who has now started his own hedge fund, BFAM Partners, in Hong Kong with backing from Nomura.

Fuchs’ team, which started trading in April 2009, produced a 48 percent return for that calendar year, followed by 20 percent in 2010. The return in 2011, when peers in the Eurekahedge Asia index lost an average 8.4 percent, was about 1 percent, according to a marketing document obtained by Reuters.

Payer said he planned to hire two portfolio managers and launch with a team of seven. (Additional reporting by Narayanan Somasundar; Editing by Edmund Klamann)

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