Hedge fund boosts HK team with Goldman hire
Hedge fund Pharo Management has revamped its Hong Kong team with a number of hires from Goldman and Mizuho.
The local hires stand out for the hedge fund's Hong Kong operation, which has tended to recruit from overseas since the office was established five years ago.
And it comes as Pharo faces a tough few months ahead as a potential Greek exit from the eurozone puts its emerging-markets-focused funds under strain.
The $4.8 billion macro fund manager has recently recruited portfolio manager Amit Bansal and trader Jack Lai.
Bansal was a managing director on Goldman Sachs' Asia macro trading desk from May 2008 until February this year.
He departed after Stuart Riley, the co-head of Goldman's Asia macro trading team, left the bank last month to join a hedge fund being set up in London.
Pharo's focus on local hires is something of a departure for the firm, which relocated Marcio Ferreira from London when it set up the Hong Kong office in 2010 and Kerim Hasan Acanal from London in 2012. The firm was set up in 2000 and also has offices in New York and London.
Lai and Stanley Chan - who joined the Hong Kong office last year - both gained experience trading Asia foreign exchange and interest rate products at Citi. Lai was a vice president at Mizuho, working in interest rate derivatives trading, from April 2013 to May 2015. Prior to that he worked in FX sales trading at Citi from June 2011 to March 2013. Pharo's founding partner Guillaume Fonkenell has a background trading on Merrill Lynch's Latin America desk in New York.
Pharo focuses on emerging market macro trends. Global macro hedge funds have recorded solid performances in the latter part of June as safe-haven bonds rallied in response to the revival of Grexit fears. In contrast, EM macro funds have been more exposed to Grexit fallout suggesting volatile months ahead which may test Pharo's tough risk management parameters.
Hong Kong-based Judy Man, Pharo's local investor relations contact, confirmed that if a portfolio manager loses more than 6.5% in a month - and 12.5% from peak to trough for the year - then all of their positions are liquidated. She declined to comment on whether those risk management policies have contributed to staff turnover at the manager's Hong Kong office.
The flagship Pharo Macro Fund, which accounts for the bulk of AUM, recorded high double-digit annualised returns in its first five years after launch in May 2005, but returns have since moderated to low double digits.
While global macro funds focus on variables such as the dollar exchange rate against the euro and yen, EM macro funds such as Pharo's are more focused on relative value between EM rates and currencies, with China's economy being a key driver.
Markets have been focused on global drivers for much of this year. A June 26 report from Deutsche Bank observed that figures out of Asia have become even more underwhelming of late.
China's central bank unexpectedly boosted liquidity last weekend following May's industrial profit increase of 0.6% year on year, far below April's number. On Saturday (June 27) the People's Bank of China cut benchmark interest rates by 25bps, and slashed the reserve requirement ratio by 50bps.