HONG KONG: Emerald Orient Investment Advisor, founded by former Citigroup Smith Barney portfolio manager Daniel Chan and four others, is set to launch a Greater China dedicated hedge fund betting on the technology and consumer sectors.
The fund, which received an asset management licence in Hong Kong on April 13 and was backed by seed capital from a large family office related to a Fortune 500 company, had started trading with about $25 million, Chan said.
"We have commitments to get another half by the end of the year to reach $50 million," the Hong Kong-based executive told Reuters in an interview.
He declined to identify the family office, citing non-disclosure agreements.
Chan, who has more than 15 years of investment management experience, is joined by Hong Kong-based Henry Tsai and Taipei-based Winnie Ho, who trace their backgrounds in venture capital and private equity funds.
The other two partners -- a former executive at Morgan Stanley and other an MIT alumnus -- will join the firm by the end of the year when Emerald will hire a prime broker, giving the money manager capacity to grow the fund further.
Chan declined to name the two partners as they were yet to join the firm.
"We do not want to grow too big because we are waiting for the partners to join," Chan said, adding that the five partners collectively managed about $700 million between them before the financial crisis, an asset they hope to raise eventually.
He said the partners have committed their wealth and the fund would raise money from family offices and Taiwanese and overseas Chinese high net worth individuals.
The fund would invest about half of the assets in mid-cap and small-cap stocks and target companies with major operations in the Greater China region and the potential to grow market capitalisation by up to threefold over the next four years, Chan added.
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