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Bloomberg – Blackstone Group LP, the world’s biggest buyout company, canceled a plan to start a hedge fund that initially aimed to invest as much as $1 billion in Asian companies affected by events such as mergers and reorganizations.
Blackstone decided not to proceed with the Asian event- driven fund “after a review of the market environment and our strategic priorities globally,” New York-based Blackstone spokesman Peter Rose said in an e-mail. The fund was to be managed by Blackstone A.M.N. Advisors.
Most of about 17 A.M.N. team members, including Chief Investment Officer Aaron Nieman, left after the March decision, said four people familiar with the matter, declining to be identified because the information isn’t public. The rest have been transferred to other Blackstone departments, they said. Rose declined to comment on specific personnel.
West Palm Beach (HedgeCo.net) – Singapore hedge fund manager, 3 Degrees Asset Management, is launching ADF Prime Ltd, a credit opportunities fund that will invest primarily in the performing debt obligations of Asian companies that have been mispriced as a result of the Global Financial Crisis.
3 Degrees also manages the award winning Asian Debt Fund, an Asian distressed debt fund that has been active since 2004.
In Asia, debt prices have corrected far more sharply than in the US and Europe. This is driven by technical factors, the fund manager says, as Asian investment banks unwind their portfolios, global hedge funds close their Asian operations, and capital is generally pulled from the region.
The new fund will capitalize on the systemic inefficiencies endemic to Asian credit markets. Due to the limited number of players, and the highly relationship‐driven nature of Asian markets, inefficiencies are being exaggerated by the global financial crisis.
Targeting quality companies that either have, or can generate, enough cash flow to repay maturing debt without dependence on capital markets, the fund seeks annual, unlevered net returns in excess of 25%.
3 Degrees has received numerous awards, including “Best Asian Distressed Debt Fund” and “Best Singapore Hedge Fund”. In 2007, Moe Ibrahim, the founder, was selected as one of 20 Rising Stars of Hedge Funds by Institutional Investor. ADF Prime will be co‐managed by Moe Ibrahim and Jeff Tolk.
ADF Prime is also available to institutional investors and ultra high net worth individuals via the Firm’s Managed Accounts platform.
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Reuters – Daiwa Securities Group Inc, Japan’s second-largest brokerage, said that it would drop its plans for a large private equity fund after talks with Blackstone fell through.
Daiwa had been in talks with private equity firm Blackstone Group LP to form a fund targeting Asian companies, Daiwa Securities Chief Executive Shigeharu Suzuki told Reuters on Tuesday.
Suzuki said in August that the brokerage was aiming for a 500 billion yen ($5.4 billion) fund to diversify its revenue sources.
"Now we are looking at funds as large as 20 billion yen to 30 billion yen," he said on Tuesday
"It is difficult to collect 500 billion yen in private equity fund in this environment," he added.
Daiwa had been aiming to form a big fund with Blackstone which has expertise in this area, Suzuki said.
Forbes – The investment banks and global hedge funds that are the usual buyers of debt and equity in struggling Asian companies have largely fled the market, leaving the distressed asset space to home-grown investors.
Local players with the cash — and the stomach — to remain in the hunt for cheap assets find themselves with the luxuries of time, choice and pricing power.
"We’re just taking our time and doing our homework, because a lot of the traditional buyers are not in the market," said Chris Gradel, managing partner at Hong Kong-based Pacific Alliance Group, which runs $1.6 billion in hedge funds.
