Former regional head of New York-based hedge fund Perry Capital LLC, Alp Ercil, obtained USD1.1 billion in investment commitments for his second Asian fund for distressed assets, said two sources who were familiar with the matter. The ARCM Master Fund II will be focusing on making three to five-year investments in equity and credit securities, disclosed the sources, who refused to be named as the matter was not for the public.
Bloomberg said in its report that Ercil-run Hong Kong-based company Asia Research & Capital Management Ltd has been seeking money for its second fund after it had placed USD935 million in capital in its maiden vehicle that started last year, the sources said.
When Bloomberg asked ARCM's head of operations, Bill Wong about the new fundraising, he refused to provided one.
Bloomberg said banks worldwide had reduced its investments in Asian lending and distressed assets after tighter regulatory scrutiny of the banks' investments were imposed since 2008. The European debt and global financial crises had occurred that year, enabling global regulators to tighten banking regulations. ACRM and another Hong Kong-based company, PAG, started to create funds for loans and distressed assets to fill the void.
The sources stated that much of the investments made by ARCM's fund were made into distressed credit in the Asian region, including Australia and Japan. Although the sources refused to provide information on the fund's return, they said the second fund obtained the capital from the same investors. Moreover, ARCM partners will reportedly bet on a similar amount in the second fund. The sources also said the second fund will have a life span of up to five years and with the possible one-year expansion, as compared with the first fund's three-year life span.
Bloomberg noted that Eurekahedge Distressed Debt Hedge Fund Index, the top-performing hedge fund strategy monitored by the Singapore-based firm, posted 19% in returns this year through last month. The strategy, said the news agency in its report, generated the best returns among fund strategies in the world in the years 2010 and 2012, according to Eurekahedge.
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