Ex-Lehman stars launch Korean fund of funds

Picard on the bridge at a new Singapore-based Korean fund of hedge funds.
HFG Korea Fund, a Korean-themed fund of hedge funds, has launched with assets of $22 million. It has a target-size of $300-500 million and target return of 12% per annum net of fees.

This is the first product from a new Singapore-based alternative investments firm, co-founded by Tom Picard and Tommy Kim. They reunite in this venture having met at Lehman Brothers where they worked together for several years, at which time Picard was head of derivatives marketing for Asia Pacific and latterly head of fixed income sales for non-Japan Asia. Tommy Kim had worked in LehmanÆs Korean fixed income team. Recently, they have had spells at Royal Bank of Scotland and Chinkara Capital respectively.

The Singapore-based investment manager for the new fund of funds is HFG Investments Pte, which is a joint venture between the Picard/Kim-controlled Opvs Investment Holdings and its minority partner from Korea, Hana Daetoo Securities.

The fund is being marketed to global investors, primarily institutional investors in Europe, Asia and the Middle East looking for hedge fund exposure to Korea.

ôWeÆve identified 28 managers in Korea and a further half dozen that will launch soon,ö says George Clooney-lookalike Tom Picard. ôAt present we have plans to invest in 13 Korean hedge funds, including eight or nine long/short managers, a few that are long-only and an activist fund. WeÆre doing this now because the hedge fund market there is now big enough with enough of a range of funds that is now generating investor interest. 260 stocks on Kospi can now be shorted. Two years ago it was only 50.ö

Fees for the fund are 1.5% and 10% subject to a high water mark. There is no lock-up and the minimum investment is $100,000.

It isnÆt easy to start a hedge fund in Korea, with stringent capital and reporting requirements, but there have been signs from the local authorities that the regulatory burden will be eased sometime during the course of this year. For now though, a large proportion of Korean-themed single country hedge funds are based outside of the frontiers of Korea. HFG has looked at far-flung funds oriented towards Korea that are based in Hong Kong, Singapore, London as well as in New Jersey and California.

3A Asia is the fundÆs investment advisor and will help with due diligence and manager selection. Ogier and Gledhill are the lawyers, Citco is custodian and Swiss Financial is the administrator.
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