Gen2 is an independent alternative asset management firm in Asia, with our main office located in Hong Kong’s Landmark building, International Commerce Center. As a multi-award winning firm we pride ourselves on offering the very best, risk adjusted returns which are ideal for clients looking to move into the Asian investment market.
Prior to founding Gen2 Partners Limited, I was the head of Kingdon Capital’s Korea office, which is highly reputable global hedge fund manager, gaining unique experience which I drew on when I decided to move into the Hong Kong hedge fund market myself.
In 2008 I set up Gen2 Partners in Hong Kong, drawing on my experience investing in Korea to support both onshore and offshore investors. Our Korean Credit Fund was launched in 2010 to work around these regulations. The fund invests mostly in investment grade fixed income funds based in Asia, tried to avoid working with high yield products in order to reduce risk.
This fund has been one of the key drivers of the success of the Gen2 Group for the past seven years. The reason for the success of our Korean investment strategy is because many international credit rating agencies do not understand the Korean financial market, and therefore they just apply their global ratings methodology to rating all bonds. This means we are able to invest in these poorly rated bonds and reap benefits accordingly.
Additionally, a lot of Korean investors have to buy bonds in vast sizes as this is how Korean institutions work, but liquidity in the market means that it is not easy to do this, therefore I am able to buy bonds ahead of time and accumulate a store of these, which I then sell in one transaction. These approaches have been highly successful and have helped to drive growth in our business since the fund’s inception.
Since the firms’ inception it has grown to become among the industry leaders in customised Asian Hedge Funds for Institutional Investors and Family Offices, in addition to being a trusted partner to help manage investors’ exposure to Asia across all alternative strategies in the region.The investment professionals in the Gen2 hedge fund team have diverse backgrounds. The majority joined the team after successful
careers in some of the world’s leading financial institutions. Others are extraordinarily gifted professionals who would like to work in an environment where they can flourish. They offer a diversity of input from the market with extensive local network, with close proximity to company executives and decision makers who are influential in the
future economic landscape of Asia. Overall our investment team is highly experienced and work collaboratively with a network of industry contacts to support growth across our fund portfolio.
Our internal culture successfully combines an entrepreneurial partnership structure with a disciplined institutional investment process to ensure that investors receive the best quality service which exactly meets their needs. We align the interests of the investment team with our investors as much as possible.
Alongside our investment team we have a dedicated team of senior partners focused exclusively on investor relations. We seek out feedback from our investors on our reporting, transparency and accessibility to ensure that we are always performing at our very best and supporting our clients.
Another differentiating factor is our proprietary risk management system. This system constantly monitors investment breaches by our Portfolio Managers. As such, our independent risk monitor firm and in-house risk team together produces monthly risk reports using state of the art risk management system, IMAGINE, that many of global banks and asset managers relying on.
We are in the process to set up on-shore hedge fund management firm in Korea to better service Korean institutional clients and potentially bring more talents who can contribute to generate alpha and achieve absolute returns regardless of market directions. This is an exciting opportunity for our firm as the Korean investment market is currently very strong, and the country has a lot of money internally, particularly invested in its pension funds, some of which are the third largest in the world, which is still growing rapidly. Owing to their aging population the country has to invest offshore, Gen2 Partners is perfectly placed to support them in this.
Find out more about Gen2 Partners visit their website: www.gen2ks.com
Analysis: Bubbles, bubbles bound for trouble?
By Marc Jones and Thyagaraju Adinarayan
LONDON (Reuters) – The $6.2 billion-an-hour rise in the value of world stocks since March was dubbed the “mother of all asset bubbles” by BofA analysts last week – and all of a sudden there is a high-pitched hissing sound.
Electric car doyen Tesla, which raced up 750% in last year’s frenzy, skidded into the red for 2021 on Tuesday, hit by a selloff of tech stocks and a plunge in Bitcoin, in which the carmaker recently invested $1.5 billion.
Both are technically in bear markets, defined as down 20% from their latest peaks, although for ultra-volatile Bitcoin which has surged well over 1,000% since March, that was admittedly only a few days ago.
More broadly, Tesla and the bellwether FAAMG quintet – Facebook, Amazon, Apple, Microsoft and Google – have seen half a trillion dollars, or around the equivalent of Austria’s economy, topsliced off their combined value this year.
Meanwhile ten-year U.S. Treasury yields, a key driver of global borrowing costs, have gone up from just under 0.9% to just shy of 1.4% which, while barely visible in a historical context, is nevertheless a 50% increase.
For UniCredit’s Co-Head of Strategy Research Elia Lattuga, the quick rise in benchmark yields represents “a significant risk for equities in general but especially for the parts of market like growth and tech stocks that have seen the sharpest expansion in valuations.”
(GRAPHIC – Bubbly assets: Bitcoin to FAANGs: https://fingfx.thomsonreuters.com/gfx/buzz/dgkvlzayqvb/Pasted%20image%201614091294852.png)
He added that the 80% rise in world stocks since last March’s COVID-19 meltdown – at a pace almost 10 times faster than that seen after the 2008 global financial crisis – had been driven by the well over $20 trillion worth of aid provided by governments and central banks.
Since the start of the year, though, the hopes that vaccines will help overcome the coronavirus and curtail the need for so much support have been building.
Tracking the trend in U.S. Treasuries, Europe’s still deeply negative German Bund yields are set for their biggest monthly jump in three years, and yields in deflation-plagued Japan are at their highest in more than two years.
There are echoes of the ‘taper tantrum’ of 2013, when world stocks saw a number of 3-5 percentage point drops as global yields began to climb.
Stocks did recover, though, and were climbing again when U.S. yields topped 3%, and for SEB investment management’s global head of asset allocation Hans Peterson, any danger signs from the current rise in yields should also come with caveats.
“I don’t see it as a fundamental threat to the markets. But it is up for discussion,” he said.
(GRAPHIC – Up and away: global bond yields on the rise: https://fingfx.thomsonreuters.com/gfx/mkt/qzjpqgobnpx/bondyields2302.png)
This time, however, as nearly 90% of respondents in Deutsche’s Bank most recent money-manager survey concluded, bubbles are building in many market segments.
Bond bubbles, biotech bubbles, Special purpose acquisition companies (SPAC) bubbles, shorting bubbles, space travel ETF bubbles. In fact, you have to search pretty hard to find an asset class that hasn’t been flagged up.
Ray Dalio co-chief investment officer of the worldâ€™s biggest hedge fund, Bridgewater, posted on Monday that around 5% of the top 1,000 U.S. firms were in bubble territory, which while high is well off dot.com boom levels.
Climate change worries also mean anything green has turned red hot.
Tesla’s rise has been a staggering 16,000% over the last decade. It is worth the majority of the world’s other carmakers combined and even with its drop this month, its shares still trade at 163 times this year’s expected earnings.
(GRAPHIC – Meteoric rise of FAANG+TM in last 10 years: https://fingfx.thomsonreuters.com/gfx/buzz/xegvbwqrkpq/Pasted%20image%201614099482523.png)
It’s a multi-storey bandwagon that increasing numbers are climbing on.
GMO’s veteran bubblecaller Jeremy Grantham has warned of a massive rise in SPACs – blank check companies that merge with privately-owned firms specifically to float on the stock market – and initial public offerings (IPOs).
SPAC-led Tesla-wannabes seem to emerge almost daily. S&P’s Global Clean Energy index has nearly doubled in value over the past year, giving it a valuation of 41 times its companiesâ€™ expected earnings.
There were 480 initial public offerings (IPOs) last year, more than the height of dot.com mania. Of that, 248 were SPACs and there have already been over 150 this year according to Spacinsider.com data and plenty with celebrity backers.
Green bonds are roaring too, along with solar, wind and hydrogen stocks. Hydrogen fuel cell manufacturer Plug Power is trading at nearly 65 times its expected revenue having seen its share price surge over 1,000% over the last year.
“These great bubbles are where fortunes are made and lost,” Grantham said recently. “…This bubble will burst in due time, no matter how hard the Fed tries to support it.”
(GRAPHIC – Global stock valuations surge well above long term averages: https://fingfx.thomsonreuters.com/gfx/buzz/ygdvzebllpw/Pasted%20image%201614091756897.png)
(Additional reporting by Dhara Ranasinghe and Elizabeth Howcroft; editing by John Stonestreet)
Oil holds near year-long highs as COVID lockdowns seen easing
By Bozorgmehr Sharafedin
LONDON (Reuters) – Oil prices were steady on Tuesday, trading close to more than year-long highs on signs that global coronavirus restrictions were being eased although concerns about the pace of a U.S. economic recovery kept gains in check.
Brent crude was up 7 cents, or 0.1%, at $65.31 a barrel by 1505 GMT, close to its highest levels since January 2020. U.S. crude fell 14 cents, or 0.2%, to $61.56 a barrel.
Both contracts rose more than $1 earlier before retreating.
“Vaccine news is helping oil, as the likely removal of mobility restrictions over the coming months on the back of vaccine rollouts should further boost the oil demand and price recovery,” UBS oil analyst Giovanni Staunovo said.
But, tempering the upbeat mood, the chair of the U.S. Federal Reserve, Jerome Powell, said the U.S. economic recovery remained “uneven and far from complete” and it would be “some time” before the central bank considered changing policies it had adopted to help the country back to full employment.
Commerzbank analyst Eugen Weinberg said the recent oil price rise was buoyed by upbeat price forecasts from U.S. brokers.
Goldman Sachs expects Brent prices to reach $70 per barrel in the second quarter from the $60 it predicted previously, and $75 in the third quarter from $65 forecast earlier.
Morgan Stanley, which expects Brent to reach $70 in the third quarter, said new COVID-19 cases were falling while “mobility statistics are bottoming out and are starting to improve”.
Bank of America said Brent prices could temporarily spike to $70 per barrel in the second quarter.
In the United States, traffic at the Houston ship channel was slowly returning to normal after last week’s winter storm, although production was not expected to fully restart soon.
Some U.S. shale producers forecast lower oil output in the first quarter.
Stockpiles of U.S. crude oil and refined products likely declined last week, a preliminary Reuters poll showed on Monday, due to the disruption in Texas.
(Reporting by Bozorgmehr Sharafedin in London, additional reporting by Jessica Jaganathan in Singapore; Editing by David Evans and Edmund Blair)
Tesla shares in the red for 2021 as bitcoin selloff weighs
By Julien Ponthus
LONDON (Reuters) – Shares in Tesla were set to plunge into the red for the year on Tuesday, hit by a broad selloff of high-flying technology stocks and the fall of bitcoin, in which the electric carmaker recently invested $1.5 billion.
At 1121 GMT, Tesla was down over 6% in U.S. premarket deals after a 8.5% drop during the previous session.
The firm led by Elon Musk has had a stellar ride since 2020, which it began at about $85 per share, before reaching the $900 mark on Jan. 25.
Currently trading at about $673 in pre-market transactions, the stock has lost 25% from its peak, which is above the 20% level which technically defines a bear market.
Bitcoin has also swung into a bear market, falling from a peak of $58,354 on Feb. 21 to a low of $45,000 earlier on Tuesday.
A Germany-based trader said he was “taking chips off the table” on Tesla as its $1.5 billion investment in the cryptocurrency could “backfire now”.
Among the factors contributing to the rise of the stocks is surging retail and institutional demand for “environmental, social, and governance” (ESG) friendly investments.
“There is a lot of reasons â€“ purely from a sustainability angle â€“ to hold Tesla, it is part of that transformation towards a more sustainable business model,” Valentijn van Nieuwenhuijzen, chief investment officer at asset manager NN IP told Reuters on Friday.
He added however that Elon Musk’s decision to invest in bitcoin could weigh on Tesla’s ESG rating.
The billionaire has been criticised for lauding bitcoin prior to Tesla’s purchase of the cryptocurrency.
His role in encouraging a retail frenzy in the shares of U.S. video game chain GameStop and driving up the price of the meme-based digital currency dogecoin have also come under fire while being acclaimed by a large fan base.
Analysts at Barclays noted that there had been a drop of conversations about the electric car makers in the Reddit’s WallStreetBets forum, which could explain some of the loss of appetite for the stock.
“With only 2-3 total submissions on each of the past several days, we remain below the trend in attention that has come along with big returns jumps in the past”, the analysts said in a note.
Other analysts have also cautioned against investing in the stock which remains one of the most expensive on the S&P 500 index at 163 times its 12-month forward earnings.
While investing in bets against the company’s stock have backfired spectacularly in the past, short interest in Tesla shares still stood at 5.5%, according to Refinitiv data.
(Reporting by Julien Ponthus, Thyagaraju Adinarayan and Karin Strohecker; editing by David Evans)
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