New Hedge Fund Solaris To Launch Arb. Fund

Oct 25 2010 | 2:12am ET

A trio of Asian trading veterans are set to launch an arbitrage hedge fund next month.

Solaris Asset Management's maiden fund will debut on Nov. 8 with S$30 million (US$23.1 million) provided by Chinese investors, Bloomberg News reports. The Singapore-based firm will focus its fundraising on its home region—and its trading, as well, at least initially.

The Solaris Capital SPC Equity Arbitrage Fund will trade equities and derivatives in Japan, Hong Kong, Singapore, Taiwan, South Korea and Australia. Within the next six to 18 months, the firm will add the U.S., U.K., Europe and India to its lineup, followed by Brazil, Canada, Mexico and South Africa, founder Thomas Tey said.

The fund will not take "directional risks," Tey, the former head of equity derivatives at Oversea-Chinese Banking Corp. and most recently an executive at the Singapore Exchange, told Bloomberg.

"Arbitrage opportunities exist in all markets under all market conditions."

Tey and his partners, Wang Wei Dong, formerly of Bosera Asset Management, and Jeffrey Wong, former of the Singapore Exchange and Australia's ASX, said they would focus on raising money from Asian investors because doing so in the U.S. and Europe is "very, very tough." Solaris aims to raise S$100 million by the end of next year.

"This is not a very conducive environment to be raising money, but we expect to get to our target," Tey told Bloomberg.

Solaris is targeting annual returns of 20% to 25%. It will charge 1.5% for management and 20% for performance. Citigroup is the fund's prime broker, while Taiyo Asset Management will handle execution and post-trade services.


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