Morgan Stanley (NYSE:MS) is playing Pac-Man with hedge funds. According to a Reuters story, the firm has made five investments in hedge funds during the past five months.
The latest deal is a minority position in Abax Global Capital, based in Hong Kong. Yes, the fund will focus on the Asian markets.
True, the markets have been volatile there lately (especially with the big drop in the Chinese equities markets). Then again, hedge funds thrive on volatility. What's more, Asian markets are relatively under-presented in terms of hedge funds.
While Abax is a new fund, its key managers are veteran investors, some coming from Citadel Investment Group.
Why a minority stake? Well, that's probably the only thing offered to Morgan. Also, it is key to provide enough "skin in the game" for hedge fund managers. If they know they can get rich, they will certainly be motivated to get above-market returns. At least that's the theory.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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Reader Comments (Page 1 of 1)
3-12-2007 @ 2:03PM
Father Richard Byrne S.J. said...
ok
3-13-2007 @ 1:38PM
Concerned Investor said...
Forget track record - what has happened to the importance of having ethics? Has any LP done due diligence on Mr. Hsu's personal history? A quick background check will reveal his questionable ethics. And based on this misinformation, he was elected to the board!
See page 20 director profiles from Coastal Greenland Limited's circular where Mr. Hsu was up for election to the board. His "career" attempts to include some questionable stints, including a completely fabricated career at Morgan Stanley, where he never worked a single day.
http://202.66.146.82/listco/hk/coastal/circulars/c060818.pdf
Excerpt below:
Mr. Christopher Chung-Yi Hsu (“Mr. Hsu”), aged 25, will be appointed as a
non-executive Director. Mr. Hsu is currently a Hong Kong-based director in the Special
Situations – Citadel Investment Group (Hong Kong) Limited. Mr. Hsu is responsible for
special situation and private investments across Asia, including Japan. As a graduate of the
School of Engineering at Stanford University with a Bachelor’s of Science in Management
Science Engineering. Mr. Hsu began his career as an engineer including positions at
Hewlett-Packard Co. and Lockheed Martin Corp. Mr. Hsu later held corporate finance and
mergers & acquisitions positions in technology investment banking at Salomon Smith Barney
and Morgan Stanley. Mr. Hsu transitioned his career to investment management and has served
as a senior analyst at Aristeia Capital in New York and vice president and principal at JMB
Capital Partners in Los Angeles. He has sat on the steering and restructuring committees of
Delta Air Lines, Silicon Graphics, and Independence Air. He is also a philanthropic director of
Stanford Undergraduate Admissions Alumni Relations.
Am I the only one who is appalled by the fact that an inexperienced, disingenuous investor can swindle his way past LPs and shareholders?