Start your day with what’s moving markets in Asia. Sign up here to receive our newsletter.
Hari Ravisankar, who helped Janchor Partners make an eight-fold return on an investment in Alibaba Group Holding Ltd., is starting his own Asia-focused stock hedge fund, said people with knowledge of the matter.
His Ishana Capital, based in Hong Kong, will start trading with external money on Sept. 1, said the people, who asked not to be identified because the information hasn’t been publicly disclosed. Initial capital for the fund has been pledged by institutions including HS Group, a Hong Kong-based strategic investor in hedge funds, the people said.
Ishana is tapping into demand for managers that can make concentrated, long-term investments in future industry giants after years of stock rallies have stretched valuations. Investors pulled $77 billion from the $3.1 trillion global hedge fund industry in five consecutive quarters of net redemptions ending March, according to Hedge Fund Research data, revolting against managers that crowded into the same stocks and charged hefty fees for mediocre returns.
Ishana is a rare regional startup this year as new hedge fund starts have sunk to a record low. Thirty-two new Asian hedge funds started in 2017, on track for the slowest year since Singapore-based Eurekahedge began to track such data in 2000.
Another high-profile startup this year was Seiga Asset Management, opened by former TPG-Axon Capital Management regional head Keita Arisawa. The Hong Kong-based hedge fund opened to outside investors in May and drew $100 million capital from Blackstone Group LP in exchange for revenue sharing, said people with knowledge of the matter.
Hong Kong-based Janchor was founded by John Ho, former Asia head of TCI Fund Management, and oversees more than $3 billion of assets. Ravisankar joined Janchor as a member of its investment team in 2011, and spent most of his six years there focusing on technology and Indian investments, said the people.
Mark Wittet, Ishana’s chief operating officer, declined to comment as did Janchor’s Ho and Seiga’s COO Irene Law.
Ravisankar was one of the people involved in Janchor’s investment in Alibaba’s 2012 convertible preferred share sale, which valued the company at $18.50 a share, said the people. The timing of the investment, which came after Alibaba’s rift with long-term shareholder Yahoo Inc. and amid weak appetite for technology offerings globally, proved prescient. Alibaba ADRs closed at $159.50 on Wednesday.
Ravisankar led Janchor’s investment during the 2012 IPO of Bharti Infratel Ltd., the Indian wireless tower owner, in another profitable bet that the firm held for years, the people said. Its shares plunged about 40 percent in the first eight months of trading before quadrupling in local-currency trading from the trough to its May 2015 peak.
Using fundamental research to identify promising companies, Ishana’s plan is to make 15 investments with a typical holding period of five years, the people said. It will focus on growth companies in Asia outside of Japan, whose market value can be below $1 billion and will take bearish bets on stocks for profit, rather than hedging, the people said.
Ishana will steer clear of industries where fundamental picks can get drowned out by macro-economic trends, such as commodities, China property and financial firms, said the people. Instead, it will focus on on technology, healthcare and consumption-related stocks.
It can make private investments, creating separate vehicles for each to give investors the option to participate, said the people.
Ravisankar spent more than six years as a technology industry merger and acquisition banker with Deutsche Bank AG in London and Morgan Stanley in New York, said the people. He later worked as senior analyst at New York-based Wolfacre Global Management.
Silas Xu, another Ishana partner, was most recently an analyst with Hong Kong-based hedge-fund manager Turiya Advisors Asia, said the people. He had worked on private-equity investments at Blackstone Group LP and Kaiwu Capital, a Chinese venture capital firm that has backed young technology and healthcare companies. A third partner, Tushar Maloo, was previously at private-equity firm Apax Partners, and New York-based hedge funds One East Partners and Kora Management. COO Wittet was a former prime broker with Deutsche Bank and Goldman Sachs Group Inc.