Ex-Credit Suisse trader says Asia hedge fund returns 60 percent

Mon Oct 22, 2012 11:25pm EDT
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By Nishant Kumar

SINGAPORE (Reuters) - Charlie Chan's Splendid Asia macro hedge fund is living up to its name, with the former Credit Suisse trader putting his returns at 60 percent this year as bets on real estate investment trusts (REIT), bonds and currencies pay off.

It's on a different scale to his previous role at the Swiss bank, where Chan's 25-year-plus career culminated in him heading a team running portfolios of over $10 billion. For Splendid Asia, 53-year-old Chan is managing a relatively small $80 million, about half of which is his own money.

The Singaporean is one of many traders leaving investment banks to set up hedge funds, as U.S. regulators seek to ban banks from trading their own money and weak markets have banks looking to trim operations.

He is also among the few who are doing particularly well. His Asia-focused fund, launched in August 2011, has already more than doubled from $37 million at launch.

"We took risk when nobody else wanted to," Chan told Reuters in Singapore last week. "REIT was a big major long and then regional equities. We have not sold anything at a loss."

One major winner was Cambridge Industrial Trust (CMIT.SI: Quote), a Singapore-listed REIT that has surged about 40 percent this year. He has also gained from trades in Singapore Airlines (SIAL.SI: Quote) and Capitaland (CATL.SI: Quote).

Chan favoured industrial REITs as they were easier to value and when he started buying them last year, some traded at 30-40 percent discount to book value. At one point, REITs made up more than half his portfolio. While he has booked some profits, REITs are still about a third of his portfolio.

Chan's success contrasts with the broader hedge fund industry. The Eurekahedge Asia index up 4 percent through September, and Asian macro hedge funds, which focus on major economic trends and events, have gained just 0.7 percent.   Continued...