Probe Postpones Ex-Highbridge Asia Manager's Fund Launch

Sep 6 2011 | 4:04am ET

Highbridge Capital Management's former top man in Asia's plans to launch a US$1 billion hedge fund have been stymied for the time being by an anonymous complaint.

Carl Huttenlocher's Myriad Asset Management was expected to debut on Sept. 1. But Hong Kong's Securities and Futures Commission has postponed awarding the new firm its license pending an investigation of the allegations that Huttenlocher's fund at Highbridge improperly valued assets or that the fund's redemption gate and eventual payout plan were designed to inflate fees at the expense of clients.

The SFC received the complaint earlier this summer and issued requests for information from both Huttenlocher and Highbridge last week, The Wall Street Journal reports. The probe is focused on specific convertible bond holdings and how Highbridge valued those assets at specific times; the regulator has asked for, among other things, copies of the fund's communications with investors and its valuation policies.

Both Huttenlocher and JPMorgan Chase, which owns Highbridge, denied any wrongdoing.

"In the three years I met with investors since 2008, I didn't hear any complaints about the Asia Fund's valuation or gating practices, and in fact, most investors applauded the plan," Huttenlocher said. "There is no factual basis to this anonymous complaint."

Highbridge shuttered the once-US$2 billion Asia Opportunities Fund after Huttenlocher's resignation in March. The fund lost about 30% during the first 10 months of 2008, leading clients to demand the return of more than half of its assets and Highbridge to segregate illiquid assets and impose withdrawal restrictions. Most redemptions were paid out by the middle of 2009, a year in which Huttenlocher's fund gained 56% and surpassed its high-water mark.

Myriad was to launch with about US$300 million in internal capital before opening to outside investors next year, when it was expected to easily surpass US$1 billion in assets.


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Midtown's Plaza District Fades As Manhattan Office Landscape Shifts

Nov 22 2016 | 6:32pm ET

Lower leasing costs, more efficient office space and the hope of projecting an image...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR