Asian Fund’s Morgan Stanley Connection

Long-time hedge fund industry people will tell you that it is not enough for a new fund to make a high return—investors have to know and feel comfortable with the manager. One of the notable success stories of the past several years illustrates the combination of factors that makes for growth.

Singapore-based Dymon Asia Capital had several advantages. Among these was an early association with Morgan Stanley,  which part owned the asset management firm where Dymon Asia Macro Fund started. Dymon founder Danny Yong chose to become independent but the relationship must have helped in raising capital in a tough market in 2009 and 2010.

Last year Morgan Stanley’s own fund of funds invested in the Dymon macro vehicle. 2011 was a banner year for the Dymon macro fund—it was one of the 10 top performers, gaining almost 18%, according to Bloomberg.  Assets have been growing at a fast clip.

With asset growth comes greater need for organizational capability. Mr.Yong  recently hired SAC Capital’s Asia chief, Jay Luo, to head operations and risk management after total assets reached $2.85 billion in February, according  to a news story.  There is the risk of overreach. The article says the Dymon macro fund lost 2% year to date.

Back in 2008 Dymon got a boost in the form of seed capital from Paul Tudor Jones’s Tudor Investment Corp. Tudor is an example of a long-lasting hedge fund business. It seems Mr.Yong  aims to build Dymon into such a business.


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