S'pore hedge funds join global leaders

Singapore

FUNDS run by Singapore-based Quantedge Capital and Dymon Asia Capital were among the 10 best performing large hedge funds in the world, according to the latest rankings by Bloomberg (view infographic).

In a list dominated by US and European hedge fund managers, the Singapore-based firms were notable exceptions. Bloomberg's rankings were for hedge funds with at least US$1 billion in assets.

The Quantedge Global fund by Quantedge, a multi-asset quantitative firm, was the second-best performing fund as at Oct 31, 2014. It returned 32.3 per cent in 2014, significantly more than the 9.2 per cent return in 2013. The fund has US$1 billion of assets.

Dymon Asia Macro came in 10th, with a 17 per cent return as at Oct 31. The macro fund, which has US$3.5 billion of assets, returned 5.2 per cent in 2013. Dymon Asia Macro was also the 19th most profitable hedge fund in the world in 2014, with US$124 million in profit.

Quantedge employs a highly diversified and strictly systematic model, and aims for constant volatility of about 30 per cent annualised on a portfolio level.

The team said that fixed income was the main contributor to its gains in 2014. Equity positions were also a key positive for the fund, while currencies and commodities positions suffered losses.

"While we have no explicit targets, we expect to further grow the fund's investment universe and in so doing, improve the risk-adjusted returns of our portfolio," Quantedge said. "This will support our endeavour of generating annualised returns of more than 30 per cent in the long term. In the short term, the biggest risk for our investment strategy would be a major sell-off in risky assets across the board."

The Quantedge fund was started in 2006 with about 55 instruments. The fund currently has more than 180 instruments in its investment universe.

Dymon's macro fund, which was started in 2008. has also been a consistent outperformer, earning a spot in the top 10 rankings as early as 2011. Co-founder Danny Yong has long been a believer in the potential for Singapore to become a hedge fund hub.

"I believe Singapore has everything that global hedge fund managers would like in terms of a world-class workforce in finance, lifestyle, health care and education," he said in 2012.