Huttenlocher’s Myriad Hedge Fund Said to Approach $3 Billion

May 30, 2014 6:05 am ET

(Adds Asian hedge-fund performance in 10th paragraph.)

May 30 (Bloomberg) -- Myriad Asset Management Ltd., the hedge fund led by former Highbridge Capital Management LLC Asia head Carl Huttenlocher, is approaching $3 billion of assets, said three people with knowledge of the matter.

Assets jumped from almost $2.4 billion early this year after Myriad accepted more capital from investors, said the people, who asked not to be identified because the information is private. Huttenlocher said in November 2011 that he planned to stop taking more investor capital when his fund assets hit $2 billion.

The Hong Kong-based hedge fund is expected to restrict new capital soon, one of the people added. Huttenlocher declined to comment, citing regulatory restrictions.

Myriad is one of the largest Asia-based hedge-fund startups since 2008. Investors have favored bigger, established hedge funds since the global financial crisis amid heightened risk awareness and as inflows have been dominated by institutions such as pension funds that are restricted from investing in smaller funds.

“The multi-billion-dollar gatekeepers serving multi- billion-dollar institutional clients will tend to only show them multi-billion-dollar products,” said Ed Rogers, chief executive officer of Tokyo-based Rogers Investment Advisors. “They’re seen as safe. You don’t get fired for allocating to that kind of manager.”

Larger, Better

Institutions have struggled to allocate money to managers in Asia where only 21 funds oversee assets of at least $1 billion, according to Singapore-based data provider Eurekahedge Pte.

Regulatory constraints or internal guidelines of hedge-fund investors that cap their ownership in a single hedge fund have precluded many investors from allocating to smaller managers, said Craig Mercer, a Sydney-based senior investment consultant of hedge funds at Towers Watson & Co., which advises institutional investors such a pensions.

“For the largest investors, this can often be a problem when allocating capital to Asia, as the bulk of Asian hedge funds are managing assets less than $1 billion,” he added. “As a consequence, assets can and often flow to the larger funds in the region.”

Increasing Demand

The Myriad Opportunities Master Fund Ltd., which focuses on Asia-Pacific-related equities, convertible and corporate bonds as well as credit and equity derivatives, started with $300 million in December 2011.

The fund’s net asset value is little changed this year, the people said. The fund returned about 20 percent last year and around 7 percent in 2012. The Eurekahedge Asian Hedge Fund Index dropped 0.9 percent in the first four months of this year after gaining 15 percent in 2013.

Myriad is raising more money as global hedge-fund assets hit a record $2.9 trillion in April, surpassing the previous peak seen in the second quarter of 2008, Atlanta, Georgia-based eVestment said in an e-mailed statement earlier this month.

“The risk appetite for hedge funds in general is increasing,” said Rogers. “Without a doubt, demand for Asia- based hedge funds, especially Asia-specific hedge funds is increasing.”