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China's Hedge Funds: Will benefit from Obama Plan?

New Hong Kong Firm Adds To Growing Phalanx Of New China Hedge Funds

January 21, 2010

Add another new firm to those taking aim at the red-hot hedge fund market in Asia. Pangu Capital is readying its first fund for launch this quarter; the Greater China vehicle will debut with at least US$12 million in initial capital, seeded by Penjing Asset Management.

Hong Kong-based Pangu will use a fundamental-research driven approach to stock-picking in China, Hong Kong and Taiwan, Bloomberg News reports. In particular, the firm plans to comb credit markets for cues about opportunities in equities. Most of its assets will be deployed in its home city as it seeks to profit from China’s economic growth. Pangu will also invest in convertible bonds and fixed-income.

“One of the lessons we’ve learned from the financial crisis is that it’s very important to stay nimble in the market,” Simon Hwang, the new firm’s chief investment officer, told Bloomberg. “Nimble in terms of the market segments and the asset classes we’re looking at so we will be able to generate the best risk-adjusted return based on the environment at the time.”

The new firm is the brainchild of Hwang, formerly of Ludgate Hill Investment Management, and Anthony Tse, a former analyst at Gandhara Capital. The two have known each other since their college days at the University of Pennsylvania’s Wharton School. Before joining Gandhara, which closed last year, Tse worked at TPG Capital; Hwang spend time at Ramius Capital Group and JPMorgan Chase before taking over the convertible arbitrage portfolio at Ludgate Hill in 2008.

Pangu is targeting 15% annual returns.

http://www.finalternatives.com/node/11024