Capstone Investment Advisors, a New York-based hedge fund, is planning to close its Hong Kong office after approximately four years of operation, reported Bloomberg.
This move underscores the difficulties faced by newcomers in the region, who must contend with established firms such as Millennium Management and Point72 Asset Management, both of which boast substantial financial resources and over 15 years of operational experience in the area, reported the publication.
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Additionally, they are competing against local rivals such as Dymon Asia Capital, Polymer Capital Management, and Arrowpoint Investment Partners.
In an e-mailed statement to Bloomberg, the company stated: “We’re committed to the region and will continue to trade Asian markets from our other offices as we have for many years.”
The closure will impact six employees who were part of the Hong Kong team, the report said.
Capstone, which was founded by CEO Paul Britton in 2004, specialises in derivatives and “volatility” trading across various asset markets.
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By GlobalDataThe firm aims to capitalise on incorrectly priced fluctuations in equities, fixed income, credit, currencies, and commodities.
As of 11 September, Capstone boasted 330 employees spread across 10 offices worldwide.
The firm has seen its assets increase from $8.8bn in June 2021, around the time when it established its Hong Kong presence, to $11bn.
However, Capstone has declined to provide additional details regarding the office shutdown.
The decision to set up office in Hong Kong was made around 2021.
In 2022, Britton envisioned allocating $1.5bn of risk capital to Asia by the second quarter of 2024, considering the region a significant part of “the global jigsaw of opportunity set.”
