Saka Capital To Close, Convert to Family Office as ZIRP Claims Another Fund

Oct 12 2016 | 9:15pm ET

Saka Capital is shuttering its credit hedge fund and will convert to a multi-asset family office that will focus on real estate, debt, equities and currencies. 

The Singapore-based was founded in 2009 by former Lehman Brothers European and Asian principal strategies head Assan Din. AUM in its SakaCapital Liquid Credit Fund peaked at around $350 million in 2012, according to a Bloomberg article. Reasons behind the closure reportedly include the impact of rock-bottom interest rates on returns. 

The current zero-rate environment makes it difficult for a long/short credit fund like Saka’s to generate returns, Din said in the Bloomberg article. High valuations across all asset classes and a lack of liquidity reportedly led Din and his team to conclude returns were likely to be 5% or lower, keeping pressure on fees and making asset growth difficult. Converting to a family office allows Saka to trade a broader range of instruments in a less-regulated atmosphere, he continued. 

Saka booked an average annualized return of approximately 7% between its founding and 2014. In the first half of 2015, the fund posted a small gain of 0.4%, according to an unidentified person quoted in the Bloomberg article, although the fund ultimately lost –2.8% for the full year. 2016 YTD returns were not available. 

Din left Lehman in 2006, ahead of the financial crisis, and subsequently co-founded R3 Capital Management LLC, a credit hedge fund acquired by BlackRock in 2009. 

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