Ex-Citadel Manager Leversha Plans to Start Asian Event-Driven Hedge Fund

Date: Wednesday, May 26, 2010
Author: Bloomberg

Simon Leversha, a former managing director of Citadel Investment Group LLC, is starting his own hedge fund this week to trade securities affected by events such as mergers, spinoffs, litigation and regulation.

Imperia Asia Offshore Fund will start investments initially with less than $10 million of partners’ money, Leversha said in an interview in Shanghai yesterday. It will target Asian stocks whose prices will be affected by corporate events over three to six months, Melbourne-based Leversha said.

Event-driven funds drew more than half of new investors in the global hedge fund industry in the fourth quarter, Chicago- based data provider Hedge Fund Research Inc. said in January. Asian event-driven hedge fund startups are trying to profit from regional political events, regulatory changes and mergers as some companies were weakened by the credit crisis.

“You have 12, 13 different markets with different events going on, such as Australia’s resources tax, Thailand’s political instability, and antagonist behavior by North Korea,” Leversha said. “Spreads have widened significantly in the last two weeks because of market volatility. And there has been indiscriminate selling, yet a lot of the deals are uncorrelated with each other.”

Forty-two percent of investors in a Deutsche Bank AG survey in January said they would invest in event-driven funds, quadrupling the percentage from a year earlier.

Hirings

Nick Taylor, a former executive of Citadel Investment, last year drew $150 million backing from Blackstone Group LP for a $208 million Asian event fund, three people told Bloomberg then. Sanjiv Bhatia, who led Deephaven’s Asia investments, and an ex- Polygon team led by Anthony Correa and Hani Abuali, also started similar funds.

Leversha, 41, who worked for Citadel in Chicago and Tokyo for nine years, set up and ran the Asian event-driven team for the hedge fund manager founded by Ken Griffin, before leaving in 2006.

Amy Zhang, a former managing director at Blackstone, will help manage greater China investments for Imperia, Leversha said. Zhang was on the Blackstone A.M.N. Advisors team which aimed to raise as much as $1 billion for an Asian event-driven fund before Blackstone shelved the plan in May last year as the financial crisis affected hedge fund returns and fundraising.

Vernon van Eck, former chief operating officer of Sydney- based Ellerston Capital Ltd., will be COO of Imperia Investment Group Pty, the fund’s manager.

Hector Colon, formerly with Citadel, will oversee Imperia’s trading and technology. Colon joins from Magnetar Capital LLC, the Evanston, Illinois-based hedge fund manager that profited from a 2007 bet that subprime housing debt will tumble in value.

Imperia’s market-neutral fund targets an annual return in the “mid-teens” without having to bet on general market conditions, said Leversha. The fund will hold 30 to 40 “core investments,” he added.