Tags: Goldman Sachs | hedge fund | Oryza | investing

Goldman Sachs's Oryza Asia Hedge Fund Said to Top $1 Billion

Wednesday, 17 Sep 2014 09:34 AM

Goldman Sachs Investment Partners, set up to allow clients to invest with some of the bank’s top proprietary traders, raised about $1 billion for its first Asia hedge fund, said two people with knowledge of the matter.

The fund, named Oryza Capital LP, informed investors in June that it would stop taking additional money after capital committed had reached its capacity, said the people, who asked not to be named because the information is private. The Asia-focused equity long-short fund started in September 2013 with an initial capital of $80 million, according to a document sent to potential investors.

Vicki Kwong, a Hong Kong-based spokeswoman for the New York-based bank, declined to comment on the fundraising because it’s private. Oryza may re-open to investors in the future, said one of the people.

Oryza hit the $1 billion mark within a year at a time when banks are hamstrung by regulations to risk their own capital with hedge funds. Asia hedge funds started in the first seven months of 2014 raised $19.5 million on average, according to Singapore-based data provider Eurekahedge Pte.

Oryza is led by Hideki Kinuhata in Tokyo and Hong Kong- based Ryan Thall, both partners with Goldman Sachs. The team had 14 employees located mostly in the two cities at the time of Oryza’s inception, according to the document last year.

Risk Capital

Oryza uses bottom-up research that involves looking at company fundamentals to pick stocks and it invests primarily in medium and large market capitalization companies, according to the document.

As co-heads of Asia investments at Goldman Sachs Investment Partners, also known as GSIP, Kinuhata and Thall managed more than $1 billion of regional holdings for its global fund before starting Oryza, two people with knowledge of the matter told Bloomberg News in September 2013. They generated annualized returns in the low teens for the Asian investment then, about fourfold that of the global fund since its 2008 inception, they added.

GSIP started investing in early 2008 with traders from the principal strategies group. It began with about $7 billion of assets, making it the biggest startup in the hedge fund industry at the time. The bank’s investment in the fund accounted for about 35 percent of GSIP’s $7.5 billion assets in October 2009, according to fund marketing documents then.

Volcker Rule

The Volcker rule in the Dodd-Frank financial-overhaul act prohibits banks from holding more than 3 percent of total assets in any given hedge fund. Goldman Sachs, which once generated about 10 percent of its revenue from proprietary trading, has been pulling its capital from hedge funds. GSIP falls under Goldman Sachs Asset Management, the division that supervises investments for customers.

Both Kinuhata and Thall were once members of Goldman Sachs Principal Strategies, according to the document last year. Together with its predecessor, the group has groomed managers now running billions of dollars in their own hedge funds.

Those include Frank Brosens at Taconic Capital Advisors LLC, Thomas Steyer at Farallon Capital Management, Eric Mindich at Eton Park Capital Management LP, Dinakar Singh at TPG-Axon Capital Management and Morgan Sze at Hong Kong-based Azentus Capital Management Ltd.

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Goldman Sachs Investment Partners, set up to allow clients to invest with some of the bank's top proprietary traders, raised about $1 billion for its first Asia hedge fund, said two people with knowledge of the matter.
Goldman Sachs, hedge fund, Oryza, investing
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2014-34-17
Wednesday, 17 Sep 2014 09:34 AM
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