Ex-Millennium’s Sullivan In Talks to Join Hedge Fund, Bank

Date: Monday, February 1, 2010
Author: Netty Ismail, Bloomberg

James Sullivan, a former managing director of Millennium Management LLC’s Asian business, said he has been in talks to join another hedge fund or bank since leaving the firm in December.

Sullivan and Harvey Liu, who worked with him managing investments in Asian telecommunications, media, Internet and gaming stocks at Millennium in Singapore, are also considering starting a hedge fund in the city-state, Sullivan said.

“Ultimately, the best case scenario is leveraging the resources and capabilities of a larger organization that may or may not be that familiar with operating that business in Asia, and helping them to build out a broader platform and business,” Sullivan, 36, said in an interview.

Assets under management at New York-based Millennium, run by Israel Englander, have shrunk to $7.5 billion, according to the firm’s Web site, compared with about $13.5 billion more than a year ago. Singapore-based senior managers who left Millennium recently include Daniel Chuman and Albert Ee, who plans to set up a hedge fund in the city-state.

Hedge-fund managers are seeking to set up or to return to Asia as the region leads the world’s emergence from the deepest recession since the 1930s. Bank of America Merrill Lynch is helping more than a dozen multibillion dollar international hedge funds set up or reestablish a presence in Hong Kong and Singapore, Dan McNicholas, head of Asia financing sales at Merrill Lynch said in January.

Long-Short Strategy

Sullivan and Liu, 36, are in discussions with “several parties,” Sullivan said, without naming the firms.

“Our goal is to build a sustainable business focused on risk-adjusted returns,” Sullivan said. “We are looking for a firm that understands fundamental long-short equity investments in Asia and is capable and willing to give people the resources they need to build the business on a medium-term time frame.”

Long-short managers buy stocks they expect to rise and hedge those bets with sales of borrowed shares they hope to buy back at a cheaper price.

Prior to joining Millennium in January last year, Sullivan worked at Citadel Investment Group LLC in Hong Kong from November 2005 to December 2008, and Oaktree Capital Management LLC in Singapore from June 2003 to October 2005.

“The strategies that I’ve run across the last couple of firms that I’ve worked for have all been negatively correlated to most of the major market indices and yet made money,” Sullivan said. “It provides significant diversification on a non-correlated basis.”

Should they decide to start their own hedge fund, it would target returns “in the high teens,” he said.

To contact the reporter on this story: Netty Ismail in Singapore nismail3@bloomberg.net