An Ex-Polygon Investment Partners LLP team led by Anthony Correa and Hani Abuali will start an Asia hedge fund as early as this month

Online, October 6, 2010 (Newswire.com) - March 3- An Ex-Polygon Investment Partners LLP team led by Anthony Correa and Hani Abuali will start an Asia hedge fund as early as this month to trade securities affected by events such as mergers, said three people with knowledge of the plan.

The fund, which will be run by Hong Kong-based Black's Link Capital Ltd., aims to generate annualized after-fee returns in the mid- to high-teens by investing in Asia-Pacific markets including Australia and Japan, said the people, who declined to be identified as the information is private. It will start with money from both partners and outside investors and hopes to raise $250 million by the end of this year, the people said.

International hedge fund managers including Citadel Investment Group LLC, Deephaven Capital Management LLC and Polygon withdrew from Asia or downsized their regional teams amid the worst global financial crisis since the 1930s. Investors are now seeking out their teams of experienced managers, traders and analysts as the industry recovers.

Blackstone Group LP backed the new Asia event-driven fund set up by Nick Taylor, ex-head of Citadel's principal investments business in Asia and Europe. FRM Capital Advisors, a unit of the London-based fund-of-hedge-funds house Financial Risk Management Ltd., in the fourth quarter invested $40 million in a hedge fund started by Sanjiv Bhatia, former head of Asian investments for Deephaven, with his two ex-colleagues.

Fred Schulte-Hillen, chief operating officer of Black's Link -- named after the hiking and running trail near Hong Kong's luxury Peak residential area -- declined to comment on its plan.

Correa, Abuali

Black's Link's investment team includes seven people who worked together at London-based Polygon for at least three years, said the people. Correa, 41, and Abuali, 40, are its co-chief investment officers, they said.

Correa, who joined Polygon in London in 2005, set up its Hong Kong office the following year and ran it until Polygon decided to shut it down last year. Prior to that, he led the special situations team on Nomura International's Asia proprietary trading desk.

Abuali started at Polygon in 2007 as an event-driven fund manager in Hong Kong. He is a former managing director in Morgan Stanley's Asia proprietary trading group.

Black's Link will make three- to 12-month investments in publicly listed securities that are affected by "hard catalysts" including mergers, leveraged buyouts, spin-offs, recapitalization, and tax and regulatory changes, the people said.

It will mostly trade stocks of companies in the region. The fund will seek to remain market-neutral, or generate profit without taking a view on broader market direction, they said.

Black's Link is betting on Asia's economic growth and capital markets development to spur more corporate events, the people said. Competition among event-driven traders in Asia has thinned and profitability has improved as investment banks cut proprietary trading activities and large international hedge funds have scaled back, they added.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.

--Editors: Malcolm Scott, Andreea Papuc

To contact the reporter on this story: Bei Hu in Hong Kong at [email protected].

To contact the editor responsible for this story: Andreea Papuc at [email protected]