(Bloomberg) — Former Goldman Sachs Group Inc. proprietary trader Morgan Sze will run his Hong Kong-based hedge fund with a leaner team after planned senior departures, said a person who has seen a letter sent to investors.
Two partners will stay after three are scheduled to leave the manager of the $615 million Azentus Global Opportunities Master Fund at the end of March, said the person, who asked not to be identified because the information is private. Sze is giving investors the option to accelerate redemptions.
Julie Chang, Azentuss head of investor relations in Hong Kong, declined to comment.
Sze is making changes to boost returns after the funds assets shrank, said the person. Azentus is among hedge fund firms trying to win back investors after losses in 2011 when the European sovereign-debt crisis and concerns about the unsteady economic recovery worldwide gave the industry the worst returns since the 2008 global financial crisis.
Azentus was one of the largest Asia hedge-fund startups set up after 2008. It began trading as an Asia-focused global multistrategy hedge fund with $1 billion in April 2011 and doubled its assets within four months.
It returned 1.1 percent last year, said the person. The MSCI Asia-Pacific Index dropped 2.5 percent in the 12 months and the Eurekahedge Hedge Fund Index, tracking managers globally, advanced 4.4 percent.
Extending Gains
Last years performance extended the funds cumulative gain since inception to nearly 12 percent, said the person. It retreated 6.8 percent in 2011, its only losing year, according to a newsletter sent to investors. The HFRI Fund Weighted Composite Index fell 5.3 percent the same year.
Sze plans to spend more time on finding investment ideas, the person said. Azentus will focus on a smaller number of investments and increase its emphasis on long-term capital gains, Sze said in comments to investors, according to the person.
Asia may be one of the best-performing markets globally this year as policy makers in China, India and Japan ease monetary policies to stimulate growth, introduce fiscal and structural reforms, the person quoted Sze as saying. The region may also benefit as an oil importer as the price of the commodity declines.
Stronger Dollar
A stronger dollar is starting to hurt U.S. corporate earnings and the country is facing monetary tightening, Sze is said to have told investors. U.S. stocks are more expensive after the Standard & Poors 500 Index beat the MSCI Asia-Pacific Index by more than 50 percent between the funds inception and the end of 2014. The U.S. benchmark is valued at about 18 times earnings, compared with 13 times for the Asia-Pacific gauge, according to data compiled by Bloomberg.
Europes less unified political systems make it more difficult to push through structural reforms, he also wrote.
Pierre-Henri Flamand, who once shared responsibility with Sze for Goldman Sachss principal strategies proprietary trading team, decided to shutter his own hedge fund, Edoma Partners, in 2012, two years after founding it, when losses prompted some investors to pull money out. Edoma raised more than $2 billion.
