Temasek puts US$3b in Avanda's hedge fund-like vehicle

A man walks past Temasek Holdings office on February 16.
A man walks past Temasek Holdings office on February 16.PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - Temasek Holdings put US$3 billion (S$4.05 billion) with a fund managed by Avanda Investment Management Pte, started last year by former GIC senior executives.

The state investment firm invested with the Avanda Global Multi-Asset Master Fund, which is managed by the Singapore-based manager, Temasek said in its annual review on Thursday (July 8). Avanda was partly seeded with money from GIC, and was started by former managers including Sung Cheng Chih, Quah Wee Ghee and Ng Kok Song, a former chief investment officer of the sovereign wealth fund.

The Avanda Global Multi-Asset Fund trades bonds, equities and currencies, with the multi-pronged strategy bearing a similarity to those plied by many hedge funds, according to a document obtained last year by Bloomberg News. Avanda's global fund doesn't intend to use leverage significantly and doesn't see itself as a typical hedge fund, the document showed.

Institutional investors are removing the most money from hedge funds since 2009 amid a period of elevated global market volatility. Hedge funds are off to their worst first-half performance, declining 1.1 per cent global through June 29, according to Hedge Fund Research Inc. Asian hedge funds have lost 2.2 per cent this year through June, data from Eurekahedge Pte show, with multi-strategy funds in the region on average producing a 0.3 per cent gain.

Avanda isn't Temasek's only investment in the fund industry. In 2014 Temasek started a venture with Dymon Asia Capital (Singapore) Pte which backs new hedge-fund managers and strategies. Temasek committed US$500 million initially while becoming a minority shareholder in Dymon. Also, the state investor in August 2009 set up a wholly owned company called Seatown Holdings Pte with committed capital of more than S$4 billion to invest in assets including stocks and bonds globally.

Temasek, through its unit Fullerton Fund Management Co, and Avanda are both cornerstone investors in Cemex Holdings Philippines' initial public offering, according to terms of the deal obtained by Bloomberg News in June. Cemex is a unit of the largest cement maker in the Americas and has set the offer price for the listing at 10.75 pesos each.