Macquarie Funds Management, after establishing a beachhead in Hong Kong three years ago, is shifting portfolio management back to Sydney.
The three-person team of Derek Mak, Indaka Nanayakkara and Veronica Ho has been disbanded. Nanayakkara and Ho were recently let go and Mak will return to his native Australia in April.
The firm will continue its compliance and settlements activity in Hong Kong.
The Hong Kong office was initially established by Stuart Turner in 2001 with a Hong Kong enhanced equities fund that catered to a local institutional investor. Mak, a portfolio manager, joined in 2002 with a mandate to add clients. He took the reins from Turner, who had returned to Australia. Early in 2003 Mak hired Nanayakkara and Ho, quant specialists from DLJ/CSFB, to improve the portfolio and help develop a regional one.
Mak says the two quant specialists are in talks with Macquarie's sell side about working as quant research analysts, where there may be opportunities created by Macquarie Bank's recent acquisition of ING's cash equities business.
"We had started the Hong Kong franchise to import the business model we developed in Australia," Mak says. "We still have a good client but the market has been tough and we couldn't attract new ones." He adds the Hong Kong enhanced equity fund will carry on, but managed from Sydney. It's a quant strategy that doesn't require company visits, for example, and can be managed from anywhere. The fund management business is overseen in Sydney by equities head Patrick Hodgens.