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Ex-Galleon Manager Pollock Plans Stock Hedge Fund at CastleBay

Date: Wednesday, March 3, 2010
Author: Bloomberg

-- Justin Pollock, a former portfolio manager at Galleon Group, and three others he worked with in Singapore at the U.S. firm that closed, joined CastleBay Capital Management Pte and will start an Asian equity hedge fund.

Pollock, 34, joined as a partner and will run the CastleBay Asia Long/Short Equity Fund, which will start on April 1, he said in an interview, declining to comment on its size. Singapore-based CastleBay, set up in 2008 by Julian Reis, former chief executive of Tudor Investment Corp.’s unit in the city- state, currently manages an Asian macro fund, which seeks to profit from broad economic trends.

The Asian long-short equity portfolio that Pollock managed at Galleon gained almost 35 percent last year, he said. Asian long-short funds, which bet on rising and falling stocks, returned about 27 percent in 2009, according to Singapore-based industry research firm Eurekahedge Pte.

“I’m extremely excited to have Justin and his team join us,” Reis, chief executive officer of CastleBay, said in an interview. “They have, in my mind, one of the most fantastic track records within Asia; they’ve got a five-year track record and they’ve shown that they are able to outperform the market and their peers considerably.”

Galleon’s funds were wound down after founder Raj Rajaratnam was charged in New York with insider trading.

Not Investigated

The firm’s Asian unit told the Monetary Authority of Singapore in October that its business in the region was then “not the subject of Securities and Exchange Commission investigations in the U.S.,” a spokeswoman at the Singapore regulator said in an e-mailed statement at the time.

Galleon’s Singapore-based staff held discussions in November about the possibility of joining New York-based Fortress Investment Group LLC, a person familiar with the matter said in December.

CastleBay’s equity fund will target annual returns of more than 20 percent “investing across the mature, emerging and frontier equity markets of Asia,” Pollock said. “The fund will adopt both fundamental and trading strategies, with a focus on liquidity and rigorous risk management.”

The team of former Singapore-based Galleon analysts and traders joining CastleBay includes Charles Stone, who will be head of research, the manager said. CastleBay has 14 employees, including Pollock and his team, across investment and operations in Singapore. It has managed the Asia macro fund since September 2008.

BlueGold, Tudor

Reis, 35, previously co-founded BlueGold Capital Management LLP, a commodities hedge-fund manager, and formerly headed Greenwich, Connecticut-based Tudor’s Singapore unit.

CastleBay’s equity fund “will allow investors to benefit from the region’s wealth creation,” the firm said in an e- mailed statement. CastleBay will be marketing the equity fund in two weeks, Reis said, and will use UBS AG as its prime broker.

Pollock joined New York-based Galleon in 2003 as a trader and became manager of the Asian long-short equity portfolio in 2005. He moved to Singapore in February 2008 from New York with his wife and two children to help open Galleon’s Asian headquarters. He was previously the head of international trading and a principal of Wilton, Connecticut-based Pequot Capital Management, which he joined in 1999.

Galleon had about 20 employees in Singapore, where it also managed a macro strategy fund under David Lau, formerly the joint head of global financial markets at DBS Group Holdings Ltd.

Rajaratnam was indicted in December on charges that he profited through inside stock tips from corporate officials and hedge-fund executives. His firm managed about $3.7 billion before it liquidated assets after the manager and several colleagues were arrested on Oct. 16 in what prosecutors called the largest insider-trading case involving hedge funds.

Rajaratnam, who is free on $100 million bail, has pleaded not guilty to the charges.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.