Pine River Capital Management to start US$150m China fund
Pine River Capital Management, manager of one of the most profitable US hedge funds last year, will start a China fund with as much as US$150 million in October, a marketing document shows.
Pine River China Fund will employ strategies including equity long-short, relative-value credit, event driven, convertible bond and quantitative arbitrage, according to the document. It will also exploit valuation gaps between yuan-denominated shares traded in the mainland and Hong Kong-quoted mainland stocks, it added.
Pine River, which has had an Asia fund since 2004 focused on convertible arbitrage, is broadening its regional trading after its profits and assets increased. The company more than doubled its assets to US$13.6 billion as of July 1 from August 2011, according to the document.
The Pine River Fixed Income Fund, overseen by Steve Kuhn, returned 35 per cent last year, in part by investing in mortgage bonds. The performance placed it second among hedge funds with at least US$1 billion.
Patrick Clifford, a New York-based spokesman for Pine River at Abernathy MacGregor Group, declined to comment on the plans because of their private nature.
Relative value strategies seek to profit from valuation gaps of related securities without betting on market direction.
The multistrategy relative-value China fund is expected to start with at least US$100 million, according to the document. It will be led by Dan Li, one of 16 Pine River partners globally.
Kuhn was sent by his former employer Goldman Sachs to China in 2005 to educate employees of sovereign-wealth funds and the central bank on the US mortgage market.