1. 1 Abax global capital Plans Managed Buyout Fund After 28% Hedge Fund Gain in
2011
2012-02-15
Feb. 15 (Bloomberg) -- Abax Global Capital, a Morgan Stanley-backed manager of
$900 million of hedge and private equity funds, plans to start a fund this year to invest in
U.S.-listed Chinese companies that will be taken private.
Abax global capital is seeking $300 million initially for the fund, which it may start in
the first half, Donald Yang, its Hong Kong-based managing partner, said in an interview
yesterday. Such investments, including in Harbin Electric Inc., helped the $300 million
Abax global capital special situations fund return 28 percent last year.
Managers like Abax global capital are planning funds with multi-year restrictions on
redemptions to enable longer-term investments. Swings in frequently traded assets and
the high correlation between different markets led to hedge funds' second-worst annual
performance last year since at least 1990, according to data tracked by Chicago-based
Hedge Fund Research Inc.
"It's very hard for a pure public strategy in this market," said Yang. "From a risk-
reward point of view, it's going to be a very challenging market for equities, probably
more downside than upside. Credits are the same story."
The HFRI Fund-Weighted Composite Index declined 5 percent last year.
The Abax global capital special situations fund bets on companies in Asia, especially
in China, whose debt and equity prices move as a result of mergers, hostile takeovers,
asset sales and large share buybacks.
It returned 21 percent in the fourth quarter, Yang said. The majority of the profits
came from actual or mark-to-market
gains from deals involving U.S.-listed Chinese firms being taken private, such as the
completion of the management buyouts of Harbin Electric and China Security &
Surveillance Technology Inc.
U.S. Investigations
Valuations of smaller Chinese manufacturing companies traded in the U.S. plummeted
after the global financial crisis. The market value of U.S.-listed Chinese companies has
tumbled since November 2010 amid allegations of financial fraud by short sellers such as
Muddy Waters Research.
The USX China Index, which tracks the performance of U.S.-listed companies that
derive most of their revenue from China, has declined 18 percent in the last 12 months.
Shares of Sino-Forest Corp., facing allegations from Muddy Waters it had exaggerated its
timber assets and operated a Ponzi scheme, have lost 94 percent since the end of 2010 in
2. U.S. over-the-countertrading.
U.S. regulatory investigations since 2010 into accounting practices of Chinese
companies that gained listing on American exchanges through reverse mergers also
damped share prices.
Going Private
In some of the fund's investments in the privatization of U.S.-listed Chinese
companies, such as Harbin Electric, Abax global capital turned its public equity holdings
into private equity investments, said Yang.
Abax global capital has held talks with Chinese private investors about the dedicated
fund to invest in U.S.-listed Chinese companies being taken private, said Yang. Investors
in the fund, which will be available to international investors and Chinese citizens with
offshore accounts, will commit their money for at least five years, he added.
The planned fund will surpass a $50 million managed account set up last year for a
small group of investors, which makes similar investments together with the Abax global
capital special situations fund, said Yang.
Abax global capital 's other investments in U.S.-listed Chinese companies being taken
private include Fushi Copperweld Inc.
Taking Private
Seventeen deals to take U.S.-Chinese companies private have been announced since
2009, and seven have been completed so far, according to data compiled by Bloomberg.
The shortage of bank financing amid the European debt crisis has made it difficult to
arrange such deals, because the investors will have to negotiate a lower price to achieve
the same expected returns without leverage, said Yang.
Private equity investors trying to strike deals without leverage may also find it hard to
negotiate with chief executive
officers, who are typically majority stakeholders, Yang said. The size of the investments
required to complete a privatization would probably dilute the CEO's holdings and result
in the outside buyers taking majority stakes in the companies.
Real-Estate Fund
Most of the assets in the Abax global capital special situations fund are in privately
negotiated debt and equity securities, including
fixed-income, structured loans and private equity types of investments, Yang said.
Abax global capital is also planning to start a fund for investments in Chinese real-
3. estate projects in partnership with former Beijing-based Merrill Lynch & Co. real-estate
fund investment professionals led by Greg Peng, Yang said. It will raise yuan capital
from Chinese investors and will target returns of 25 percent to 35 percent from the
investments, Yang said.
Chinese investors have committed about 1 billion yuan ($159million) to the fund,
which is going through business
registration and may hold its first close by the second quarter, Yang said.
2 Two Nominations for Abax global capital at Eurekahedge Asian Hedge Fund
Awards
2012-04-16 06:06pm
Abax Global Capital's exceptional performance has resulted in two nominations for the
2012 Eurekahedge Asian Hedge Fund Awards. The finalists will be announced on May
25.
Abax global capital is pleased to have been nominated for the Best Greater China Hedge
Fund and Best Event Driven Hedge Fund award categories. We are gratified that our
commitment to delivering outstanding returns to investors is being recognized in the
investment community.
3 Abax global capital Seeks Chinese Companies Abandoning U.S. Listings
2011-05-18 00:59:03.581 GMT
By Bei Hu
May 18 (Bloomberg) -- Abax Global Capital, a Morgan Stanley-backed manager of $900
million of hedge and private equity funds, is seeking to profit from Chinese companies
abandoning U.S. listings for higher valuations in Hong Kong.
Abax global capital has invested in companies including Harbin Electric Inc. and Fushi
Copperweld Inc., which are seeking delisting from the U.S. in leveraged management
buyouts and may go public in Hong Kong later, Donald Yang, Abax global capital’s
Hong Kong-based managing partner, said in an interview yesterday.
Valuations of smaller Chinese manufacturing companies listed in the U.S. have
plummeted after the global financial crisis, with the collapse of their traditional investor
base of smaller U.S.-based hedge funds and individuals, said Yang.
4. U.S. regulatory investigations since last year into accounting practices of Chinese
companies that gained listing on American exchanges through reverse mergers also
damped share prices.
"Their traditional investor base is gone," he said. "But you can pick out quite a few
companies in the space where the business fundamentals are very solid."
One hundred and twenty-nine Chinese companies listed in the U.S. trade at an average
eight times their estimated 2012 earnings, against 11 times for 276 peers traded in Hong
Kong because of a lack of research coverage, high concentration of shares among their
major shareholders, and limited trading volume, according to data compiled by Citigroup
Inc.
More than 3,200 hedge funds have been liquidated between 2008 and last year, 36
percent more than new starts, according to Chicago-based Hedge Fund Research Inc.
Reverse Mergers
The U.S. Securities and Exchange Commission last year started a probe amid concerns
that some Chinese companies listed in the U.S. were doctoring their financial statements.
U.S. exchanges have frozen or delisted shares of more than a dozen China-based firms
since March amid the probes centered on those that have obtained listings through
reverse mergers -- deals in which a closely held firm goes public by acquiring a traded
one, thereby avoiding the scrutiny of an initial public offering.
Abax global capital is making the investments through Abax global capital Opportunities
Fund and separate accounts for clients which together oversee $350 million using the
same strategy. The fund bets on companies in Asia, especially mainland China, whose
debt and equity prices will move as a result of mergers, hostile takeovers, asset sales and
large share buybacks.
Attractive Returns
"I think this is going to be the focus for the next couple of years at least," Yang, 45, said.
"It’s a good investment thesis."
These companies provide more attractive returns than the traditional Chinese targets of
private equity funds because they are larger in scale, have more established business
operations and better internal controls. They are also valued cheaper and investors could
recoup their money sooner, Yang said.
Abax global capital is focusing on companies that it has provided financing to before and
is therefore familiar with, Yang said.
5. It expects to recoup such investments in less than two years, including the typical six-
month ban on sales of pre-IPO investments after trading starts, he said. It can also sell the
investments to private equity companies.
Abax global capital Opportunities Fund returned just more than 2 percent this year, and
20 percent in 2010, Yang said. It exited about 80 percent of pre-2008 investments with
about 12 percent annual returns, either when the loans matured or when the companies
paid it back before maturity after obtaining alternative sources of funding at lower rates,
he said.
Fund Restructure
Abax global capital earlier this year restructured its special situations fund by creating
two share classes, one with a two-year ban on withdrawals in exchange for fee discounts,
and one that allows quarterly redemption that charges higher fees.
Investors were subject to a one-year outright ban on withdrawals and penalties for
redemptions in the next two years when the fund was set up in 2007, said Yang.
The more frequent redemptions are to help attract U.S. and European investors who have
been reluctant to put money into less liquid funds since the crisis while allowing Abax
global capital to make longer-term private investments with higher returns, he said.
Chinese individuals and institutions now account for the majority of its assets, Yang said.
Abax global capital started a 500 million yuan ($77 million) private equity fund
denominated in the Chinese currency early last year, with China Development Bank
Corp. as its anchor investor.
It is also setting up a venture with the Chinese bank to manage another private equity
fund that is expected to receive as much as 4 billion yuan of commitments from mostly
institutional investors, Yang said. The venture, which has received government approval
and is going through the registration process, may become operational in the next two
months.
4 2010 Asia Hedge Fund 25- Abax global capital
2010-08-10
Abax global capital is listed again in influential Institutional Investor's "Asia Hedge
Fund 25" climbing to No. 22 from No. 23 of 2009 list. Visit Institutional Investor's or
click the icon at top right corner to download the pdf file.
6. 5 Abax global capital Follows CLSA With Chinese Private Equity Fund
2009-08-24
By Bei Hu
Aug. 24 (Bloomberg) -- Abax Global Capital Ltd., a Hong Kong-based hedge fund
manager backed by Morgan Stanley, plans to start a private equity fund in China that
invests in companies making environmentally friendly products such as clean energy.
The yuan-denominated fund aims to raise about 500 million yuan ($73 million) from
Chinese investors by its first close in two months, Donald Yang, Abax global capital’s
Hong Kong-based president, said in a phone interview Aug. 21. It will be sponsored by a
large Chinese financial institution, whose name he declined to reveal because of pending
regulatory reviews of the plan.
International managers such as Blackstone Group LP and CLSA Asia-Pacific Markets are
also planning to tap Chinese demand for local-currency private equity funds. Abax global
capital is joining peers such as Income Partners Asset Management (HK) Ltd. that are
diversifying their product range and investor base after the worst year for hedge funds in
2008.
“Money is tight, so people will raise assets where they can,” said Paul Smith, Hong
Kong-based managing director at Triple A Partners Ltd., which provides startup capital to
hedge funds and helps market them. “Everyone is having to learn new tricks to stay
afloat.”
Abax global capital, set up in 2007, initially focused on so-called special situations
investments in companies involved in events such as mergers, acquisitions, asset sales
and large share buybacks.
“Last year, most participants in the industry felt significant pain during the market
turmoil,” said Yang. “From a business point of view, having a single strategy is risky.
What we’re trying to do is to build a platform with multiple strategies.”
Convertible Bonds
Abax global capital’s $300 million special situations fund, which invests mainly in
convertible bonds, notes and equity warrants, booked double-digital returns this year as
credit markets rebounded and the quality of the company credits it holds strengthened,
Yang said without giving specific numbers.
The fund was down “significantly” last year after the credit market slump forced it to
mark down the value of its holdings, said Yang, declining to give a more specific
performance number. The illiquidity of the fund’s private investments made it difficult to
value and sell the assets at attractive prices when the market collapsed, he added.
Income Partners, which oversaw debt and macro assets, started its first equity hedge
funds in July.
7. Raising Money
Abax global capital in January raised about $50 million from a small group of wealthy
Chinese individuals for funds that focus on publicly issued, frequently traded high-yield
and convertible bonds, Yang said. The funds have returned at least 30 percent since
inception, profiting from the doubling of some companies’ bond prices since mid-March,
he added.
“We were lucky enough to raise capital at the beginning of the year and chose attractive
positions that benefited from the up trend of the credit market,” Yang said. “Otherwise, if
you are holding positions that you bought a year or two ago, you may not have
experienced as much of the overall benefit in the recovery.”
Neo-China Land Group (Holdings) Ltd.’s convertible bonds maturing in June 2011
traded as low as 22 cents on the dollar in February after missing a coupon payment on
$400 million of high- yield bonds in January. The convertible bonds have recovered to
62.5 cents, according to data compiled by Bloomberg.
Hopson Development Holdings Ltd.’s convertible bonds maturing next year rose from
32.3 cents in November to 96.8 cents on the dollar, according to Bloomberg data.
New Hires
Abax global capital, which manages about $560 million, also opened its Tudor
Investment Corp.-backed Asia macro fund, which seeks to profit from regional economic
trends, to outside investors for the first time.
Abax global capital is hiring at least three people for the Chinese private equity fund, said
Yang, who helped found Abax global capital and was a former head of Hong Kong and
Greater China debt capital markets at Merrill Lynch & Co. Abax global capital’s special
situations team will assist the fund’s management, Yang said.
6 Abax global capital 拟在华设立私募投资基金 专注环保公司
2009-08-27
来源:ChinaVenture 时间:2009-8-27 14:56:00
据海外媒体报道,摩根士丹利支持下的香港对冲基金管理公司 Abax Global
Capital 计划在中国推出私募股权投资基金,将重点投资致力于制造清洁环保产品
的公司。
Abax Global Capital 香港总裁 Donald Yang 在 8 月 21 日的采访中表示,Abax
Global Capital 希望此基金首轮募资 5 亿元人民币(约 7300 万美元)将向中国投资
者募集,于两个月内完成。该基金将引入一家大型中资金融机构资金,目前尚 未
公布此机构的名称。公司将至少雇佣了 3 名中国管理者筹备此次基金,Abax global
8. capital 的特殊情况团队也将为基金管理提供帮助。
Abax Global Capital 成立于 2007 年,主营重大事件相关的特殊情况投资,比如:
合并、收购、资产售出和大量股份回购。Abax global capital 的 3 亿美元基金主要用
来投资可转债,票据和股票凭证。
7 盘实基金(Abax global capital):现在投资债券比投资股票机会更好
http://www.sina.com.cn 2009 年 06 月 10 日 02:23 第一财经日报
郭茹 王艳伟
“危机”既是“危”,更是“机”。自 2008 年以来,这场起始于美国的国际
金融危机给金融市场造成了巨大的冲击。而在盘实基金(Abax Global Capital)总
裁杨向东看来,在反思这场危机的同时,更要积极寻找危机所带来的投资机会。
在这场危机中盘实基金虽然也遭受了损失,但以结构性债券产品投资为主的
投资策略却使他们幸存了下来。而今年以来他们又将眼光瞄向了高收益的债券市
场, 抓住了这场危机中的机会。盘实基金于 2007 年在香港成立,有“中国人办的
第一家对冲基金”之称,也是摩根士丹利所投资的为数不多的几家基金管理公司
之 一。
日前,CBN 记者采访了该基金创始人兼总裁杨向东。
亚洲债市动荡更大
CBN:能否简单介绍一下公司的主要投资模式?
杨向东:盘实基金成立伊始的 2007 年 7 月,正值上一轮“牛市”的顶峰。基
金的投资策略是结合了债权、股权及期权的结构性私募投资,在追求高回报的同
时,强调风险控制及在市场低潮时对投资价值的保值。这种在国际对冲基金被称
为“特殊情况”(Special Situation)的投资在当时市场环境下极具吸引力,也是摩
根士丹利决定成为基金的初始投资人并在管理公司中占有少数股份的主要原因。
今年年初,我们 确信经历了金融危机洗礼的亚洲债券市场极具投资价值,并募集
了新的基金,迄今回报率已经达到了近 30%。
CBN:国内对海外的债券市场并不太了解,近几年亚洲债券市场的情况是怎
样的?
15. 险投资基金工作过一年,曾来哈尔滨考察过很多项目。中能董事长邓天洲认为杨
“眼光敏锐、效率高、(投资)方式灵活”。
目前盘实已投资的行业有天然气、城市燃气、经济型连锁酒店、房地产、制造业、
造纸业、水处理等。不过与 VC/PE 不同的是,盘实会同时投资同一行业的多家同
类公司。比如在投资完中能国际后,盘实又紧接着投资了同属于天然气加油和汽
车气化改造市场的西安西蓝天然气股份有限公司。杨自称比较喜欢该行业,认为
其带有公用事业性质,又属于环保类的石油替代品。而盘实目前所聚焦的公司是
红筹公司,包括上市公司和拟上市公司。他解释道,这类公司的债务融资无需发
改委审批。盘实的投资形式基本上都是“无担保长期债+可转债”,以私募为主。
对企业投资后,盘实一般都会要求其选择大的会计师事务所、大的律师事务所等,
对 OTCBB 公司则要限期转板纳斯达克。同时,盘实也会在资本、公司运营等方面
尽力帮助企业。对于这个年轻的团队来说,从事这样一个“前沿”的工作,也存
在风险。
在多次接受电话采访后,杨向东期望着越来越多的人加入到“债权+股权”的投资
中来,只专注于“债权+股权”的基金还不多。
9 Morgan Stanley Investment Management Reaches Agreement to Acquire Stake
in Abax Global Capital Limited
2007-03-12
Newly Formed Firm Will Invest in Asian Special Situations with Focus on Greater China
HONG KONG, March 12, 2007 Morgan Stanley (NYSE: MS) announced today that its
Investment Management division (MSIM) has reached an agreement to take a significant
minority ownership position in Abax Global Capital Limited (Abax global capital), a new
hedge fund advisor being formed to invest in special situations in Asia. The transaction
adds Abax global capital to the stable of best-inclass independent investment managers
with whom MSIM collaborates, including Avenue Capital, Lansdowne Partners and
Traxis Partners.
Abax global capital, to be headquartered in Hong Kong, will invest in private and public-
sector issuers in Asia, with a primary focus on Greater China, including mainland China,
Taiwan and Hong Kong. The firm is being founded by Chris Hsu, a former managing
director at Citadel Group, with responsibility for that firm multi-billion dollar Special
Situations Asia Group; Donald Yang, formerly managing director and head of Hong
Kong and Greater China debt capital markets at Merrill Lynch; and Frank Qian, formerly
a trader and risk manager in Asia, Europe and the U.S. at Citadel Group.
16. Hans Schuettler, Chief Executive Officer, Morgan Stanley Asia, said, the Asian capital
markets provide exciting opportunities for growth that we are well positioned to realize
given our Firm deep roots and strong platform in the region. As part of the strategy to
grow our asset management business in Asia, with a specific focus on China, we are
expanding the range of investment strategies we offer to both our institutional and our
high net worth individual clients. And, this new alliance with Abax global capital will
provide our clients access to investment expertise in a distinctive, highly attractive asset
category.
Stu Bohart, Head of Alternative Investments at MSIM, said, the continue to expand the
breadth and depth of our investment offerings to accommodate clients desire for
innovation and high performance across a broad range of traditional and alternative asset
categories. Abax global capital team, led by Chris Hsu, Donald Yang and Frank Qian, is
highly regarded and has an outstanding track record in Asian capital markets. With its
unique, integrated investment platform and its extraordinary level of talent, Abax global
capital will be another significant enhancement to our alternative product offering.
Chris Hsu, Chief Executive Officer and Managing Partner of Abax global capital said,
they are very pleased to be entering a strategic partnership with Morgan Stanley
Investment Management. The firm support will be highly beneficial as we work together
to identify the most promising investment opportunities presented by the rapid growth of
Asian capital markets. We believe that combining forces in this way will provide a
platform for meaningful collaboration between the companies.
In recent months, MSIM has expanded its alternative investment capability through a
series of new products, partnerships and investments. In addition to launching 24 new
alternative investment products in fiscal 2006, the Firm acquired FrontPoint Partners, a
multi-strategy hedge fund business that focuses on providing alpha producing solutions to
institutional clients.
About Morgan Stanley Investment Management
Morgan Stanley Investment Management, together with its investment advisory affiliates,
has over 400 investment professionals around the world and $478 billion in assets under
management or supervision as of November 30, 2006. These entities offer investment
management services to a diverse client base, which includes governments, institutions,
corporations and individuals.
About Morgan Stanley
Morgan Stanley is a leading global financial services firm providing a wide range of
investment banking, securities, investment management, wealth management and credit
services. The Firm's 2 employees serve clients worldwide including corporations,
governments, institutions and individuals from more than 600 offices in 30 countries. For
further information about Morgan Stanley, please visit www.morganstanley.com.
17. 10 摩根斯坦利投资亚洲对冲基金 Abax global capital
http://www.sina.com.cn 2007 年 03 月 19 日 03:55 中国证券网-上海证券报
摩根斯坦利表示将购买 Abax Global Capital Ltd 的一部分股份。Abax global
capital 是一家投资于亚洲的新兴对冲基金,由 Citadel 投资公司的前管理人士设立。
摩根斯坦利表示,它的投资管理团队将在 Abax global capital 基金中,占据显著的
所有者监控职位。
Abax global capital 的创始人包括 Chris Hsu,Citadel 对冲基金的前常务董事。
他将负责对中国大陆、台湾与香港等地的投资。
Abax global capital 将专注于所谓“特殊情境”投资,设定公司的债务与股本
将随着兼并,恶意收购,资产拆分或 buyout 而产生变化。根据 Eurekahedge 数据,
投资亚洲的对冲基金去年产生了 16.1%的资产回报率,北美市场的回报率是
11.5%,欧洲是 11.35%。(阿焰)