Hedge funds on parade at Merrill cap-intro conference

The first hedge fund march past of the new season is hosted by Merrill Lynch in Hong Kong for a gathering of international investors.

The firm now sports the unwieldy moniker of Bank of America Merrill Lynch, but let's abbreviate to 'Merrill'. Last Friday the bank hosted the opener of the hedge fund capital introduction season in the form of its Asia-Pacific conference at Hong Kong's Shangri La hotel.

In recent years, the firm in Asia has been lucky enough in the past to employ several of the living legends of Asian capital introductions,. They now own an even bigger legend in the shape of Morgan Stanley veteran Jim Fallon, one of the masterminds behind Morgan's successful Shanghai cap-intro event. His sidekick today is Joanne Bryant-Rubio, who recently joined the firm from equity brokerage CLSA.

However, it was a little difficult for the media to take the temperature among delegates, as the event was kept private, while correspondents sat separately in a nearby room. The next big capital introductions event for Merrill is likely to be held in 2010 in New York. The firm's event in Palm Beach, Florida was not held this year.

"I don't think that putting hedge funds and investors together earlier this year would have produced results," says Anita Nemes, who runs Merrill's capital introduction function globally out of London. "There is a spread of strategies, and we've only invited managers that we think will interest investors. That means managers who have performed well through the crisis. If you are a manager who didn't perform so well in the crisis, then I think redemption will take 12-18 months of good performance."

There were 13 managers on show at the conference, in front of some 80 investors. All the managers on display employ Asia-themed strategies.

One hedge fund manager present said that the same types of questions were being asked as before the crisis. That may seem to contradict the impetus for greater depth of due diligence, but we should bear in mind that the searching questions are seldom asked at these 'speed dating' kind of conferences; the deep-dive due diligence tends to take place afterwards.

"I was genuinely impressed with the turnout for this event," says Joanne Murphy, Hong Kong-based marketing director of hedge fund seeder and distributor Triple A Partners. "As the first Asian prime broking capital introductions group in line showing their wares after a fairly barren year of activity so far, this event was always going to act as a barometer on where interest for investment into the Asia-Pacific is currently at."

"From the atmosphere and overall tone of the managers and investors today, the clap-o-meter certainly rang loud and clear," she adds. "There's money actively looking for homes."

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