Asian hedge funds: Comfortable with quant
Good times for distressed debt
Emperor Greater China Fund’s Ed Mullen has lived in Shanghai for six years, managing money there for international investors. “I saw China as a bright spot and an emerging economy when others were not convinced,” he says. “I had enough capital to invest my own money so I set up a long/short mainland China fund. For the first few years it was tough to get investors on board but now they realize that with average annual GDP growing by over 10% for the last 25 years, a 200 to 300 million consumer middle class and no trade deficit, China is an interesting place to be.” Emperor shorts larger-cap stocks in China-related companies in Hong Kong, Singapore, Taiwan and the US where there is little issue of borrowing stock. The fund’s net exposure varies typically between 20% and 70%. “At the moment we have a long bias because of the market but in May and June we made great money on the shorts we had put on with a net exposure of around +10%.”
