Dymon, Ex-SAC Manager Vine Plan $500 Million Hedge Fund

Feb 24, 2014 3:22 am ET

(Updates with comments from an adviser on hedge funds in fourth paragraph.)

Feb. 24 (Bloomberg) -- Dymon Asia Capital (Singapore) Pte is joining with Carl Vine, a former SAC Capital Advisors manager, to start a global equity long-short hedge fund with a bias toward the Asia-Pacific region.

The Port Meadow fund will be run by an investment team headed by Vine, based in in Oxford, the U.K., and will seek $500 million, said Dymon President Jay Luo. Vine will be the chief investment officer of Port Meadow, a division of Dymon, that will drive investments, while Dymon will provide infrastructure support, Luo said.

Dymon, one of Asia’s largest hedge funds, is expanding globally by providing non-investment services to help managers start their own funds. In 2012, Singapore-based Dymon hired Luo, who was the former head of SAC Capital’s Asia-Pacific operations, and Chief Executive Officer David Chan, a former head of macro trading at Goldman Sachs Group Inc., after ranking as the top-performing large hedge fund in Asia in 2011.

“Successful hedge funds are often the best model for seeding and partnership platforms,” said Peter Douglas, principal of Singapore-based GFIA Pte, which advises investors seeking to allocate money to hedge funds. It allows “a successful manager to leverage their business without exceeding capacity for their core strategy and partner with an organization with similar values.”

A strategic partner, Port Meadow’s partners and Dymon’s partners will be investing about $150 million in the fund, Luo said, declining to name the strategic partner.

Starting Anew

“Unlike a traditional seeding arrangement where the manager may need to spend half of his time on building the non- investment functions of a hedge fund, this hybrid model will benefit Port Meadow investors,” Luo said in an e-mail. “The business risk typically associated with a new launch is essentially removed,” he said, adding that “the investment team will be entirely focused on producing returns for the investor.”

The fund will start in the second quarter pending regulatory approval, Luo said. It will stop taking additional money from investors once assets reach $500 million to allow the investment team to focus on returns, he said.

Vine, 38, started his investment career in London in 1997 at Prudential Plc. He moved to UBS AG in 2000 and started to manage long-short investments in 2001, he said in the e-mail. Luo recruited Vine to SAC in 2008, where he ran a long-short fund and left the firm at the end of 2013, Vine said.

SAC Alumni

Vine is among those to start anew after leaving Stamford, Connecticut-based SAC, which settled an insider-trading investigation in November, paying a $1.8 billion settlement and agreeing to no longer manage money for outside clients. The firm, founded by billionaire Steven Cohen, will turn into a family office managing his wealth, estimated at about $9 billion, along with employee money.

SAC planned to shut its London office by the end of last year, President Tom Conheeney wrote a memo sent to employees in October.

David Perrett, a former senior fund manager at UBS O’Connor, and Li Shen, who worked with Vine at SAC, will be joining Vine as equity partners in the new venture, Luo said. David Tuthill, Vine’s SAC trader, will work with them as well, Luo said.

Mark Panday, a Hong Kong-based spokesman at UBS, declined to comment on Perrett’s departure.

Dymon Fund

The Eurekahedge Global Long Short Equities Index, which employs a similar strategy as the Port Meadow fund, returned 15 percent in 2013, outperforming the 8 percent return by the benchmark that tracks all strategies. A short trade bets on securities’ prices falling.

Dymon’s macro fund in 2011 had a more than 20 percent return, the most in Asia among hedge funds with assets of more than $1 billion, according to data compiled by Bloomberg. It started trading in August 2008 with $113 million of initial capital from Paul Tudor Jones’s Tudor Investment Corp., the Greenwich Connecticut-based hedge fund, as well as partners and employees and managed to grow its assets to more than $2.5 billion in 2012, according to the firm.

--Editors: Andreea Papuc, Linus Chua