TCI-Backed Algebris Plans Singapore Office as Asia Lures Hedge-Fund Firms

Date: Monday, April 26, 2010
Author: Bloomberg

Algebris Investments LLP, an activist hedge-fund manager seeded by Christopher Cooper-Hohn’s The Children’s Investment Fund Management UK LLP, plans to open an office in Singapore as Asia’s growth draws investors.

The London-based firm registered its Asian office in Singapore as Algebris Investments (Asia) Pte, according to the Accounting and Corporate Regulatory Authority, which regulates businesses in the city-state. Maria Gabriela Bianchini, Algebris’s London-based chief operating officer, couldn’t be reached for comment.

About 45 percent of investors in a Deutsche Bank AG survey released in March said they would add investments in hedge funds focusing on Asia outside of Japan this year, compared with 18 percent in 2009. The region is leading a recovery from the deepest global recession since World War II.

“Hedge-fund managers are coming to Asia to take advantage of two major opportunities: long-term secular growth trends driven by the rise of the urban middle-class, and short-term trading opportunities that are still available in less efficient emerging markets,” said Frank Brochin, managing director at New York-based StoneWater Capital LLC, which invests about $130 million in Asian hedge funds.

Algebris’s Asian business was incorporated in Singapore in March, according to a filing with ACRA. Its registered office address is at PWC Building on Cross Street, in the city-state’s central business district, the filing shows.

Long/Short Equity

The firm, set up by Davide Serra and Eric Halet in 2006, manages the Algebris Global Financials Master Fund and makes long-term investments in companies worldwide, according to its Web site. The fund is a global financials long/short equity fund focused on banks, insurance, diversified financials and real estate, according to a biography of co-founder Halet.

“Algebris may take an active role in certain situations to promote sound governance and increase shareholder value,” it said. Halet was previously global industry analyst at Wellington Management Co., a Boston-based investment firm.

Algebris campaigned for changes at Trieste, Italy-based Assicurazioni Generali SpA in 2007, pressuring Europe’s third- biggest insurer to improve its performance and governance. The firm sold most of its shares in Generali after failing to sway management on the insurer’s strategy, La Repubblica reported in April 2009, citing an interview with co-founder Serra.

Serra is a former head of equity research for European banks at Morgan Stanley.

Soros Fund, GLG

Asia’s economic growth is luring alternative asset managers to set up offices in the region. Soros Fund Management LLC and GLG Partners Inc. are among those planning a Hong Kong office, people familiar with their plans said in January.

“We expect the Asian hedge-fund industry to grow significantly in the coming years, both in terms of number of managers and assets under management,” StoneWater Capital’s Brochin said.

The arrivals will mark a reversal of the trend in the last two years when international hedge-fund managers including Ramius LLC, Citadel Investment Group LLC, Och-Ziff Capital Management Group LLC and Deephaven Capital Management LLC closed down or downsized offices in Asia amid investment losses and redemptions globally.

“Lots of money left Asia in the market events of 2008, lots of shops or competitors have downsized or exited,” said Ruey L. Goh, Singapore-based senior research analyst at fund-of- hedge-funds firm EIM SA. “With less competition and also more inefficiency, Asia is attractive.”

Singapore is reviewing rules for its investment management industry, including hedge-fund managers, for the first time since it introduced incentives to lure alternative asset managers in 2002. The Monetary Authority of Singapore will start a public consultation within two weeks on proposals to ensure regulations remain “sound and responsive to the changing needs of the various stakeholders in the fund management industry,” it said in an e-mailed statement on April 21.

“It is good for long term growth,” EIM’s Goh said.