Singapore-based APS Asset Management, with over USD850 million under management, is preparing to use equity derivatives in the coming months for a USD10 million hedge fund it launched last year. "This is an effective way to leverage our positions," said Wong Kok Hoi, cio and founder. It has considered since its inception last year using products such as equity options in Taiwan and Korea to create synthetic short positions because offshore borrowing is restricted (DW, 4/14). It is preparing to pull the trigger after being advised by its prime broker Goldman Sachs Global Securities Services to look at the instruments. The long/short fund primarily invests in cash equities in Asian markets including Japan, Hong Kong and Singapore. Wong noted that the notional size of OTC derivatives positions could total 10% of the portfolio this year.
Wong is heading to Europe and the U.S. next month to raise additional capital for the APS Asia Pacific Hedge Fund, for which the firm hopes to raise USD100 million by year-end.
Sam Stubbs, executive director at Goldman in Hong Kong, said, "These products allow you to effectively get access to leveraged positions in such markets as Korea and Taiwan."
