An advisor to China’s state pension fund is teaming up with a Morgan Stanley vet to launch a China-focused hedge fund in September.
The new vehicle, JT Capital Management, is the brainchild of Larry Zhang, who has been advising China's national social security fund for two years, according to Bloomberg news.
The new Hong Kong-based vehicle, which aims to raise $100 million in assets under management, will invest in Chinese equities—both those listed domestically and on international exchanges.
“We are building an institutional quality investment platform with local information access, and it offers a high- level of transparency,” Zhang told Bloomberg.
Zhang will work alongside Kurt Baker, who served as head of Morgan Stanley’s prime brokerage unit in Asia before leaving in November 2008. In addition to an office in Hong Kong, the new firm will maintain a research office in Beijing.
Previously, Zhang served as a partner of London-based hedge-fund manager GSA Capital Partners, which he left in 2008 to return to China to advise the state pension system.
According to estimates by Singapore-based information provider Eurekahedge, Asia-focused hedge fund projected assets under management will rise from $105 billion at the end of 2009 to at least $182 billion by the end of 2012. In the near term, a Deutsche Bank survey conducted in March showed that 45% of investors plan to raise allocations to Asia (ex-Japan) funds, compared with 18% in 2009.