Equities

Ovata Capital Grows, Assets Hit $1.1B Amid Asia Success

Ovata Capital grows team after assets reach $1.1 billion, focusing on equity and event-driven strategies in Asia.

By Alex P. Chase

5/16, 01:11 EDT
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Key Takeaway

  • Ovata Capital Management expands its team with four new hires as assets surpass $1.1 billion, signaling growth and strategic reinforcement.
  • Despite market challenges in Asia, Ovata reported a 10% gain last year and a 5.6% increase in early this year, outperforming regional hedge fund benchmarks.
  • The firm's success is driven by arbitrage and relative-value trades, with significant contributions from corporate governance reforms in Japan and South Korea.

Ovata Capital Expands Team

Ovata Capital Management Ltd., a hedge fund firm based in Hong Kong and led by James Chen, a former BlueCrest Capital Management LLP alumnus, has recently expanded its team by hiring four new members. This move comes after the firm successfully increased its assets to over $1.1 billion. Among the new hires are Dan Ho, joining as a portfolio manager from BlueCrest, focusing on equity relative-value investments, and Jon Lowry, previously of Millennium Management and Elliott Management Corp., who will serve as an Asia event-driven portfolio manager. Additionally, Lucas Eshleman and Dominic Ho have been recruited as traders. These appointments reflect Ovata's strategic efforts to strengthen its team amidst the competitive hedge fund landscape in Asia.

Navigating Market Challenges

Since its inception in 2017 with more than $200 million, Ovata has navigated through several tumultuous years in the Asian hedge fund industry, marked by geopolitical tensions, regulatory changes, and economic slowdowns. These factors have particularly impacted funds with significant investments in China, leading to steep losses for some. Despite these challenges, Ovata has managed to produce steadier returns, demonstrating resilience and strategic adaptability. The firm, which counts Canada Pension Plan Investment Board and New Holland Capital among its investors, employs around 40 people, with a balanced distribution between investment and non-investment staff.

Performance and Strategy

Ovata's fund reported a 10% gain last year and a 5.6% increase in the first four months of this year, outperforming the Eurekahedge Pte gauge that tracks Asia-focused hedge funds. This success is attributed to arbitrage and relative-value trades, with India being a key return driver in the past 18 months. Ovata's trading strategy includes profiting from the price differences of holding companies versus subsidiaries and arbitraging pricing gaps between shares of the same companies listed on different exchanges. The firm has also capitalized on corporate governance reforms in Japan and South Korea's "corporate value-up" program, which encourages companies to improve valuations through tax incentives.

Talent Management and Competition

Ovata's recent expansion comes amid a competitive environment for talent in the hedge fund industry, with the firm having to navigate the departures of key personnel such as Abhinav Maheshwari, a partner specializing in relative-value investments, and Karyo Oh, a portfolio manager focused on Japan. Despite these challenges, Ovata continues to attract high-caliber professionals, as evidenced by the recent hiring spree and the addition of Dennis Collins, a former LMR Partners portfolio manager, in December. This strategic bolstering of its team underscores Ovata's commitment to maintaining its competitive edge and pursuing growth opportunities across Asia.