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UK hedge fund Prana Capital weighs Asian move

Date: Friday, January 8, 2010
Author: Parvathy Ullatil and Laurence Fletcher, Reuters

* Prana plans to open S'pore office to focus on Asia - source

* Founder likely to relocate to Singapore - source

UK-based hedge fund firm Prana Capital is looking eastwards, with plans to open a office in Singapore where its founder, Peregrine Cust, will relocate to, said a source familiar with the matter.

"We are exploring that option," said a Prana spokesman, when contacted by Reuters.

"It's not imminent," he added, without going into further detail.

Prana is looking to focus on the Asian markets and tap investors in the region with the impending move, said the source.

Prana runs a discretionary global macro hedge fund, Prana Ltd, which was launched in 2005 by Cust. The fund, which invests in several asset classes, including Asian equities, rose 72 percent in 2009 and has about $115 million in assets, according to Lipper data. Lipper is a unit of Thomson Reuters. The fund firm is set to join a growing list of Western fund managers who are attracted by the strong outperformance of Asian markets and growing wealth in the region.

Asia-focused (excluding-Japan) hedge funds had gained about 34 percent by end-November 2009, outstripping the around 20 percent increase in their European counterparts.

The MSCI AC Asia excluding Japan index .MIASJ0000PUS jumped 68 percent in 2009, more than double the 31 percent gain in global equities .MIWD00000PUS.

Competitive cost structures, including lower start-up costs in the region, are another big draw, as it allows smaller firms to thrive.

Other US and European funds have also been sharpening their presence in the region, with leading firms such as S.A.C. Capital Advisors opening up regional offices last year.

Another US-based hedge fund Stark Investments is launching an effort to hire managers in Hong Kong after it handed over control of its Asia funds to two senior partners in October, said an industry source with direct knowledge of the situation.