US manager to launch Asia hedge fund

Stark Investments plans a November start for its convertible arb product.

Stark Investments, a Milwaukee, Wisconsin-based hedge fund manager with $2.4 billion of assets under management, plans to launch its first Asian fund in November. "A separate Asian product shows there are opportunities here," says Charlotte Anning, director of sales and marketing in Stark's London office, who made her remarks at a hedge fund conference in Singapore.

The firm currently has global, Japanese and European funds, and already invests roughly $550 million in Japan and $150 million in Asia. It looks at various arbitrage opportunities in convertible bonds and other financial instruments, usually from a bottom-up approach.

The ongoing issuance of convertible bonds from markets such as Taiwan is one attraction. So is good liquidity and volatility, and the maturation of local credit default swaps and other hedging tools. Investment banks have more products to offer fund managers in this region, and it is now possible, if not always easy, to hedge in markets such as Taiwan and Korea.

Stark is still looking for distributors, and has contacted 20 or so fund of hedge funds managers globally. Asia's hot now and Anning says "so far none have said no". The firm is raising money in the US and Europe; there are comparatively very few pools of capital in Asia going into hedge funds.

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