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Hedge Fund Myriad Asset Is Quitting Hong Kong After 11 Years

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(Bloomberg) — Carl Huttenlocher’s hedge fund firm Myriad Asset Management Ltd. plans to shut its office in Hong Kong, the city where it was founded and based for much of its 11 years, said a person with knowledge of the matter. 

Myriad made the decision after pandemic-induced curbs made it difficult for Huttenlocher and his portfolio managers to travel, and the fund’s Asian investment underperformed other strategies this year, the person added, asking not to be identified as the information is private. The firm plans to make West Palm Beach, Florida its new base, said the person. 

Hong Kong is seeing an exodus of expatriates and locals as its Covid policies and national security law fuel discontent. The financial hub has seen almost 172,000 more residents leave than arrive since the start of 2021, with about 78% of the net departures occurring this year, according to official immigration data.

Among European companies operating in Hong Kong, nearly half plan to fully or partially relocate operations and staff out of the city, according to a survey released in March. Banks have also moved some employees. Hong Kong-based hedge funds have historically run leaner operations in the city, and a growing number have recently set up satellite offices elsewhere.

Myriad is rebooting after a double-digit monthly loss during the March 2020 market rout. Its global multi-strategy hedge fund returned at least 12% last year, and has had a single-digit gain this year, the person added.

Myriad will shut its Asia fundamental equity and credit strategies, which lost money in 2022, said the person. James Bean and John Hedigan, two Hong Kong-based portfolio managers, will relocate to the US to expand global equity capital markets investments. Jeremy Edelberg on its global convertible bond team will also move there. 

Huttenlocher’s own relocation to the US in 2021 — after 16 years in Asia — was seen as the end of an era. He was a former Asia head of Highbridge Capital Management, the JPMorgan Chase & Co. hedge fund unit that was an early mover in the region. He initially went to Denver, Colorado, making it easier to monitor investments in different time zones. 

The latest shifts leave Huttenlocher the sole manager using fundamental analyses to invest in equities, credit, interest rates and currencies, said the person. Other remaining strategies will include global equity capital markets and Alexander Julie-led global convertible bond investments. 

Myriad has been in discussions with investors to return capital in the existing fund toward the end of this year. It plans to start anew next year with a fresh vehicle to reflect the major shift from an Asia-focused multi-strategy hedge fund with multiple portfolio managers to a global fund that invests across different asset classes.

A Myriad representative declined to comment. 

Myriad, which oversaw about $5.5 billion in 2018, has seen its assets decline to nearly $1.5 billion at the end of last year, said the person. At its peak, Asia accounted for as much as 95% of its investments. A mid-2020 restructuring envisioned Asia’s weight would fall to half, with fewer portfolio managers at the firm.

Asia hedge funds lost 6.4% this year through April, trailing global peers’ 1.8% decline, according to Eurekahedge Pte data. Investors in the region’s stocks and bonds have struggled amid renewed Covid disruptions, China’s technology crackdown and real estate tightening, as well as geopolitical tensions and surging global inflation.

©2022 Bloomberg L.P.

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