Ramius set to join retrenchment of global hedge funds from Asia
By Raphael Minder and Andrew Wood in Hong Kong and John Burton in Singapore 2008-11-03
Ramius, a US hedge fund with $11bn under management, is considering handing back its Hong Kong trading and advisory licences, in a sign that some funds are retreating from Asia.
The move comes amid increasing signs of a pullback from Asia by hedge funds amid a global industry slump which is forcing them to raise cash and cut operating costs ahead of an anticipated surge in redemptions. In Asia alone, outflows from hedge funds accelerated from $2.1bn in August to $4.3bn in September, says database, Eurekahedge.
Global hedge funds are also focusing on their main home markets. “When there is real trouble, you try to save the mother ship rather than satellite offices, even if those are still marginally profitable,” says an industry insider.
Anthony Miller, a partner at Ramius, said that the possible abandonment of Hong Kong licences was “mostly about cutting costs and reallocating money to the US and Europe”. He added: “We will continue trading Asia from New York and London.”
London-based GSA Capital also recently closed a Hong Kong office that was opened last August.
“When there is a highly volatile environment, you want to make sure all your resources are close together and run everything from the centre,” said Farshid Sadr-Hashemi, a partner at GSA, which manages $2bn.
TPG-Axon has recently let go of at least a third of its Asian staff, while maintaining its US workforce, according to insiders. In Singapore, Concordia recently shut its office, while Tantallon Capital has scaled back with the closure of a small-cap fund. The companies would not comment.
Regulators in Hong Kong and Singapore confirmed that some funds were withdrawing, but Hong Kong’s Securities and Futures Commission stressed that “we are not currently seeing signs of extensive business closures”.