Three partners said to leave former Goldman trader's hedge fund

[HONG KONG] Former Goldman Sachs Group Inc proprietary trader Morgan Sze will run his Hong Kong-based hedge fund with a leaner team after planned senior departures, said a person who has seen a letter sent to investors.

Two partners will stay after three will leave the manager of the US$615 million Azentus Global Opportunities Master Fund at the end of March, said the person, who asked not to be named as the information is private. Sze is also giving investors the option to accelerate redemptions.

Julie Chang, Azentus's head of investor relations in Hong Kong, declined to comment.

Mr Sze is making changes to boost returns after the fund's assets shrank, said the person. Azentus is among hedge-fund firms trying to win back investors after losses in 2011 when the European sovereign-debt crisis and concerns about the unsteady economic recovery worldwide gave the industry the worst returns since the 2008 global financial crisis.

Azentus was one of the largest Asia hedge-fund startups set up after 2008. It began trading as an Asia-focused global multistrategy hedge fund with US$1 billion in April 2011 and doubled its assets within four months.

It returned 1.1 per cent last year, extending cumulative gains since inception to nearly 12 per cent, said the person. It retreated 6.8 per cent in 2011, its only losing year, according to a newsletter sent to investors. The HFRI Fund Weighted Composite Index fell 5.3 per cent the same year.

The Eurekahedge Hedge Fund Index, tracking managers globally, returned 4.4 per cent last year.

Pierre-Henri Flamand, who once shared responsibility with Sze for Goldman Sachs's principal strategies proprietary trading team, decided to shutter his own hedge fund, Edoma Partners, in 2012, two years after founding it, when losses prompted some investors to pull money out. Edoma raised more than US$2 billion.

BLOOMBERG