(Updates with comments from investment advisor in fourth paragraph.)
Oct. 16 (Bloomberg) -- Azentus Global Opportunities Master Fund, run by former Goldman Sachs Group Inc. proprietary trader Morgan Sze, gained 11 percent in the first nine months after fees, said a person with knowledge of the matter.
The $904 million Asia-focused global multistrategy fund, managed out of Hong Kong, has returned more than 4 percent since inception on April 1, 2011, said the person, who asked not to be identified as the information is private. Julie Chang, an investor relations officer at Azentus Capital Management Ltd. in Hong Kong, declined to comment on the fund.
Azentus, one of the largest Asia hedge-fund startups in history, is trying to attract more capital after withdrawals cut assets in half from the firm’s peak. It has been watched as an example of whether large teams of proprietary traders can survive and thrive as independent hedge-fund managers outside the global banks that used to house them.
“Even when you have very successful proprietary traders roll out of sterling firms such as Goldman Sachs, running their small business is a new experience for them,” said Ed Rogers, chief executive officer of Tokyo-based Rogers Investment Advisors. “Quite often, even the large, well-funded startups will go through teething pains as the owner-managers learn how to run an independent business with limited resources.”
The MSCI Asia-Pacific Index advanced 2 percent between Azentus’s inception and the end of September this year. The Eurekahedge Asian Hedge Fund Index, the gauge that tends to track smaller hedge funds in the region, has returned 11 percent since Azentus began trading.
Azentus started trading with $1 billion and stopped taking new money after assets hit $2 billion four months later, said the person.
The fund lost almost 7 percent in 2011 and returned about 1 percent last year. It managed $1.6 billion in April, a person with knowledge of the matter said then.
Sze made investment changes between August and September last year, reducing the number of stocks the fund invests in and increasing bets on the best ideas, allowing it to boost returns, said the person.
The number of stocks that the fund has long investments in declined to 34 in September from 51 percent a year earlier, said the person. Similar changes were made to short investments. Long investments are a bet that stock prices will rise. Shorting involves selling borrowed securities, wagering that their prices will fall.
The Eurekahedge Asian Hedge Fund Index has gained 10 percent this year through September, while the global hedge fund gauge by the Singapore-based data provider has increased 4 percent.
The largest monthly loss of the fund this year was around 1 percent, said the person. The MSCI Asia-Pacific Index dropped 5 percent in May.
Azentus attended a Goldman Sachs event in Singapore last week that showcased Asian hedge funds to investors, according to a document seen by Bloomberg News. It was the first time the fund was marketed since it started and signaled it is open again to new money, said the person.
Azentus’s team aims to rebuild assets to about $1.5 billion, said the person.
Sze was once jointly responsible for the Goldman Sachs principal strategies proprietary trading team with Pierre-Henri Flamand. Flamand’s March 2010 departure to start his own hedge fund left Sze at the helm of the bank’s largest proprietary trading unit.
Flamand’s Edoma Partners LLP decided to close down after it lost money and assets shrank in “unprecedented market conditions,” he said in an e-mailed statement in November.
--Editors: Andreea Papuc, Iain McDonald