John Ho, former head of Children's Investment Fund's (TCI) Asian operations, speaks to the media during a news conference in Tokyo April 25, 2008. [Agencies]
John Ho, former Asia head of the Children's Investment Fund Management UK LLP, raised more than $100 million from investors for his own hedge fund which bets on rising and falling stocks in the region.
Janchor Partners Pan Asian Fund started trading in January with about $40 million, mostly from US university endowments and family offices, Hong Kong-based Ho, 34, said in an interview on July 2. It returned 9.9 percent after fees through June 30, against the estimated 2 percent loss of the Eurekahedge Asia Long/Short Equities Hedge Fund Index.
The inflow into Ho's fund contrasts with the trend of new and small Asian hedge fund managers struggling to grow assets amid heightened competition for capital. More than 90 percent of the money raised by Janchor is locked up for three years, even as global investors have demanded greater freedom to withdraw their capital in the wake of the credit crisis.
"Investor appetite for longer lockups is greatly diminished," said Harvey Twomey, Hong Kong-based head of Deutsche Bank AG's prime finance institutional client group in Asia-Pacific." But for the right strategy with a compelling high-quality team, it is still possible to attract longer-dated monies."
The lockup allows the fund to make investments over a longer period where competition is less intense, said Ho. In return, it lures investors with promises to align the managers' interests with theirs through lower fees and a pledge to return part of the performance fees if a profitable year is followed by a losing year, he added.
Long-term capital
"The capital that's coming into Asia is generally shorter- term, and capital constrains investment strategy," Ho, Janchor Partners Ltd's chief investment officer, said. "We only raise long-term capital because we want to focus on doing longer-term investing. The fees are a little lower to reflect that it's long-term capital."
Seventy-five new Asia-focused hedge fund firms started since 2009 with an average $16.9 million and now manage about $28.9 million each, according to data compiled by Eurekahedge Pte in Singapore.
Ho left London-based Children's Investment Fund, founded by Christopher Cooper-Hohn and also known as TCI, in July 2009 to set up Janchor, a play on the initial of his first name and the word "anchor," with four former TCI colleagues.
Janchor, a long-short equity fund, uses research on companies' financial and industry prospects to pick the stocks it wants to buy and short in markets including Chinese mainland, Hong Kong, Taiwan, Japan, Australia, South Korea and India. It doesn't employ the activist approach often used by TCI, as in the case of J-Power, Ho said.
