Morgan Stanley will take a minority holding in Abax Global Capital, a new hedge fund adviser being formed to invest in special situations in Asia, the investment bank said in a statement on Monday. Neither the price nor the size of the stake were disclosed.
Speculation around the fund is that it will launch with $1bn of assets, which would make it the biggest debut fund out of Asia (ex-Japan). The fund’s founders are Chris Hsu, a former managing director at Citadel, Donald Yang, formerly MD and head of Hong Kong and greater China debt capital markets at Merrill Lynch, and Frank Qian, formerly a trader and risk manager at Citadel.
The deal is the latest in a series of hedge-fund transactions for Morgan Stanley, although it is the first time the bank has bought into a fund with zero track record.
Last year the bank went on a shopping spree: its biggest deal was the acquisition of FrontPoint Partners, which had $5.5bn in AUM, and which saw key FrontPoint executives merged into the Morgan Stanley hierarchy. It also holds minority stakes in New York-based distressed player Avenue Capital and London-based Lansdowne Capital. Morgan Stanley also markets products by Traxis Partners, a US-based hedge fund established in 2003 by former Morgan Stanley strategist Barton Biggs.
Other investment banks’ hedge fund forays – like Nomura/Fortress and Lehman/Spinnaker – look positively miserly by comparison.