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Alphadyne said to spin off S$2.85b Singapore hedge fund unit

[SINGAPORE] Alphadyne Asset Management LLC, a New York-based hedge-fund manager overseeing US$4.8 billion in assets, will separate its Asia team into a new firm, said a person with knowledge of the matter.

Bart Broadman, a co-founder of Alphadyne and chief investment officer of its Asia strategy, will be CIO of the new Singapore-based firm, said the person, who asked not to be identified as the information hasn't been publicly disclosed. 

The transition will begin in the first half of 2017 and the new firm will retain its current investment focus on economic trends in Asia by trading in areas such as interest rates and foreign exchange, the person said.

Eric Teo, the chief operating officer at Alphadyne's Asia unit, declined to comment.

The Asia team, as a separate firm, is expected to manage a similar amount to the US$2 billion (S$2.85 billion) it oversees now, including a US$1 billion allocation from Alphadyne's global fund, the person said.

Some of the region's largest hedge-fund firms have resulted from spinoffs from global managers. Graticule Asset Management, the Singapore-based hedge-fund manager headed by Adam Levinson that had US$4.2 billion of assets in September, emerged from Fortress Investment Group LLC's Asia macro business early last year.

Symmetry Investments, the Hong Kong-based firm led by Guo Feng, came from Izzy Englander's Millennium Management and had US$2.6 billion in assets as of February.

"Spinouts make sense if an experienced manager wants more autonomy and more of a say in managing money and running a hedge fund," said Will Tan, a managing director at Principle Partners Pte in Singapore, who specialises in recruiting for hedge funds.

"And if it's a high-profile manager, running his or her own show will also help in raising money from investors."

Alphadyne's Singapore unit is starting on its own as the hedge fund industry is struggling with investor redemptions and lackluster returns. Asia's hedge funds suffered the highest withdrawals globally in October, with investors pulling US$2.3 billion, or 1.3 per cent of the region's assets, according to data from Eurekahedge Pte.

Alphadyne, which also has a third office in London, was founded in 2005 by Mr Broadman and Philippe Khuong Huu, who were colleagues at JPMorgan Chase & Co, according to the firm's website. Investors include pension funds, insurance companies, asset managers, investment consultants and sovereign wealth funds.

Before joining Alphadyne, Mr Broadman spent 16 years working at JPMorgan, mainly in Asia, according to the Alphadyne website. His roles included serving as chairman of the management committee for the region and as global head of interest-rate derivatives.

BLOOMBERG