Folger Hill raises fresh cash for burgeoning Asia investment unit

Jimmy 3x3 | 6 Views | 2017-11-30T18:16:31+00:00

BOSTON (Reuters) - A budding business in Asia is helping revive the fortunes of U.S. hedge fund executive Sol Kumin.

Sol Kumin, chief executive officer of Folger Hill Asset Management poses for a portrait in New York, U.S., November 29, 2017. REUTERS/Lucas Jackson

The Singapore and Hong Kong-based unit of Kumin’s Folger Hill Asset Management LP received a second commitment of up to $250 million from trading magnate Steven Schonfeld, the hedge fund founder told Reuters in an interview after the portfolio gained about 8 percent over the 12 months through October.

Performance helped seal the verbal commitment for the new funds and Folger Hill has already drawn $25 million of that amount.

“It is very exciting,” Kumin said in his Boston office. “We think we will continue to grow a great business there.”

Success in Asia has helped offset stumbles in Folger Hill's U.S.-focused business, which has suffered losses and investor redemptions since it launched in 2015 with more than $1 billion. (reut.rs/2b9eugR)

Returns there have stabilized this year with a 4.5 percent gain in the first ten months of 2017 and a fresh $100 million commitment from Leucadia National Corp, which is also backing Folger Hill’s Asia endeavor.

The Asia arm will soon open to new investors, aiming to raise about $250 million by March 31, 2018, Kumin said.

With the fresh commitment from Schonfeld Strategic Advisors LLC, Folger Hill’s Asia assets could soon total around $1 billion. The business now has about $525 million under management, a little more than half of the firm’s $1 billion in overall assets.

Sol Kumin, chief executive officer of Folger Hill Asset Management poses for a portrait in New York, U.S., November 29, 2017. REUTERS/Lucas Jackson

In a statement, Ryan Tolkin, who oversees investments at Schonfeld, said the deal is “core” to his firm’s mission to expand internationally.

Kumin made his name at Steven A. Cohen’s SAC Capital Advisors, where he spent nearly a decade and served as chief operating officer and a trusted adviser to Cohen. Kumin was one of the first senior executives to leave after SAC settled insider trading charges with the U.S. government in 2013 and Cohen prepared to convert the firm into a family office that manages his personal fortune.

In launching Folger Hill in 2015, Kumin set out to mimic SAC, where teams of stock pickers vied for a central pool of money to invest and the firm delivered average annual returns of 30 percent. Unlike Cohen, Kumin does not invest money himself, but is known for spotting and recruiting trading talent.

Kumin splits his time between New York and Boston, where he took over the wood-paneled space that once housed SAC’s Back Bay office. The Boston office, decorated with horse-racing and Boston sports team memorabilia, houses the firm’s trading desk although the majority of investment staffers are in Manhattan. Kumin said he travels to Asia between five and six times a year

As part of his Asia expansion, Kumin reunited with Angus Wai, previously SAC’s head of Asia Pacific. Wai is now leading Folger Hill’s effort to hire top talent and spot winning investments in Hong Kong and countries including Japan, China and South Korea.

By January, Folger Hill expects to have roughly a dozen portfolio managers working in Asia, as many as in the United States, Kumin said. Seven will be based in Hong Kong and four will be based in Singapore.

Kumin believes having a bigger presence in Asia will allow Folger Hill to compete with other sizeable U.S.-based hedge funds that have relatively modest staffing there.

“Being a smaller and newer firm doesn’t put us at a disadvantage,” he said.

Reporting by Svea Herbst-Bayliss and Lawrence Delevingne; Editing by Lauren Tara LaCapra

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