Kumar, Ex-TPG-Axon Partner, Said to Start Hedge Fund

Date: Thursday, April 9, 2009
Author: Bei Hu, Bloomberg

Hari Kumar, a founding partner of New York-based asset manager TPG-Axon Capital Management LP, is starting his own hedge fund with $75 million of initial capital from him and a partner, said two people familiar with the plan.

LionRock Capital Pte, based in Singapore, will begin investing June 1 with the money from Kumar and Julian Snaith, the people said. The multistrategy fund will focus on trading Asia-Pacific stocks, said the people, who declined to be identified because the information isn’t public.

LionRock may raise capital from external investors at a later date, though the timing and terms haven’t been decided, they added. Kumar and Snaith declined to comment when reached through e-mail.

Hedge fund startups are increasingly relying on managers’ money to take advantage of the cheapest stocks in years after a global credit crunch and record industry losses last year made investors more demanding and reluctant to gamble on new funds.

“Setting up with their own money will give them full autonomy over their investments,” said Will Tan, a Singapore- based recruiter at Principle Partners Pte. “Their pedigree and hopefully performance going forward will put them in a good position to attract more money.”

The MSCI Asia-Pacific Index is trading at close to its end of 2003 level after a 43 percent tumble last year, the sharpest full-year decline in its 21-year history.

Hedge Fund Starts

New hedge fund starts slumped to 659 globally last year, the slowest since 2000, according to Chicago-based Hedge Fund Research Inc. Fifty-three percent of more than 1,000 hedge fund investors surveyed by Deutsche Bank AG in February said they wouldn’t allocate money to managers overseeing less than $100 million.

“Realistically, no matter what your reputation was, it’s quite hard to raise money on the street for a new venture,” said Paul Smith, Hong Kong-based director of Triple A Partners Ltd., which provides startup capital to hedge funds.

Investors that prefer to invest in a new hedge fund from day one fell to about 3 percent since last year, from nearly 30 percent in 2006, the Deutsche Bank survey found. Those that won’t allocate money to new funds increased to about 28 percent this year, from about 19 percent in 2006, it added.

Former Goldman Sachs Group Inc. partner Dinakar Singh founded TPG-Axon, which oversees $14 billion in assets, in 2005 with Kumar and two other colleagues from the New York-based investment bank.

Kumar, 33, was previously based in Hong Kong for TPG. He left TPG last year and moved to Singapore for family reasons, one of the people said.

Prior to starting TPG-Axon, Singh set up the Asian arm of Goldman’s principal strategies group in 1998. Kumar was one of the earliest members of the Asian desk, rising to become managing director running the business in Asia outside Japan before leaving in 2004.

Before LionRock, Snaith, 30, worked as a principal at TPG- Axon and in Goldman’s principal strategies unit.

About 33 percent of investors in the Deutsche Bank survey this year said they would consider investing in a new hedge fund overseen by a manager with a verifiable track record from a previous employer.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net