Singapore Sovereign Fund Founds Possible Hedge Fund Firm

Feb 10 2010 | 10:30am ET

Singapore’s sovereign wealth fund has established an investment firm that could become the largest hedge fund manager in the region.

Temasek Holdings’ Seatown Holdings is expected to have some US$3 billion in investment capital. The new firm—whose name is English for “Temasek”—will specialize in emerging markets funds and assets classes in which Temasek has not invested in the past. But Asian Investor reports that Seatown could be a massive hedge fund platform, the first ever set up within a sovereign fund.

The new firm is expected to employ a multi-strategy approach, according to AI. Bloomberg News also reports that the firm will be an absolute return shop.

Still, Temasek is remaining tight-lipped about the new firm, other than confirming that it exists, and a Reuters source is contradicting other reports.

“It is an investment company and it is not a hedge fund,” the source said.

Seatown reportedly already boasts a core staff, led by Charles Ong as CEO. Ong has been with Temasek for eight years, following a career that took him through Lazard Freres and Deutsche Bank. The new firm also features Nasser Ahmad, formerly of New York hedge fund DiMaio Ahmad Capital, as co-CEO. Margaret Lui, currently managing director of investments at Temasek, was named the new firm’s chief operating officer.

In addition to investing the city-state’s own assets, Seatown will eventually open its doors to Singapore’s citizens, allowing them to co-invest with the sovereign fund.

Seatown is Temasek’s second investment subsidiary. It already runs Fullerton Fund Management, which specializes in long-only investments but also invests in hedge funds and funds of hedge funds.

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