Protege-Backed Expedition Shuts Asia Volatility Fund After Loss

Protege-Backed Expedition Shuts Asia Volatility Fund After Loss

Expedition Advisors Ltd., backed by New York-based Protege Partners LP, is returning investor capital in its Asia volatility hedge fund after losses. Expedition’s hedge fund, which sought to profit from stock swings in Asia outside of Japan, lost 14 percent since its May 2012 inception, according to its March newsletter, the last one sent out to investors and non-investors in the fund and obtained by Bloomberg News. “A prolonged period of suppressed volatility combined with a low ’vol of vol’ environment created a very difficult backdrop for our core strategy,” Craig James, Hong Kong-based chief investment officer of Expedition, said in an e-mailed statement. “Given the current climate, it was decided that money would be returned to our strategic investor.”The company is closing the fund as central bank easings globally increased market liquidity and subdued stock swings. The Chicago Board Options Exchange Volatility Index (VIX) averaged about 16 since May 1, 2012, one-fifth of the 80.9 reached on Nov. 20, 2008, when economic slowdown at the height of the global financial crisis threatened corporate profits. The index, known as VIX, measures the cost of using options as insurance against declines in the Standard & Poor’s 500 Index.

James declined to comment beyond the statement. Jay Suresh, who helped open Protege’s Singapore office in 2010, didn’t reply to an e-mail message from Bloomberg News seeking comment.

The fund had about $50 million at its inception, according to a person familiar with its assets.

Expedition’s is at least the second Asia volatility hedge fund to shut since last year. Sharp Peak Vega Feeder Fund, which invested in over-the-counter equity derivatives such as options and volatility swaps, closed after losing 18 percent between its October 2011 inception and June 2012, people with knowledge of the matter told Bloomberg News in October.

James headed Asia investment of AM Investment Partners LLC, a New York-based hedge fund set up by two former Deutsche Bank AG executives, before founding Expedition last year.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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