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12 Apr 2007

Hedge Fund Manager To Launch Multi-Strategy China Fund

UG Investment Advisers, a hedge fund manager with over $500 million invested in China's Qualified Foreign Institutional Investor program, has announced that they are looking to raise $200, to $500 million more for the launch of a Greater China multi-strategy hedge fund, a senior executive with the firm said in a Reuters interview.

UG Investment Advisers has six main hedge fund vehicles, including the UG Formosa Patriot Fund, UG Formosa Multi-Strategy Fund, UG Great Wall Hidden Value Fund, UG-Adwell Great Wall Absolute Return Fund, UG Hidden Dragon Balance Fund and UG Hidden Dragon Undervalued Assets Fund. The new vehicle's strategies would include looking for arbitrage opportunities in closed-end funds listed in mainland China, said Richard Fan, a partner and director with the $900 million hedge fund manager.

"It's in the very preliminary stages right now. If it does proceed and go forward it will probably launch in the next three months or so," he told the Reuters Hedge Funds and Private Equity Summit in Singapore. Fan said UG wants to launch a new multistrategy fund because the Formosa vehicle is currently about 70 percent invested in Taiwan, and the firm wants the flexibility to put a greater percentage of assets to work in mainland China.

The new fund would be focused on investing in China's more than 50 closed-end funds, which typically list on an exchange and trade like stocks. While Asia-focused hedge fund assets have risen six-fold over the past five years, rising more than 30 percent last year alone, Fan said UG is not overly concerned about competition when it comes to closed-end fund arbitrage strategy in China.

State Street Hedge Fund Report

State Street Corporation, the world’s leading provider of financial services to institutional investors, released a report on hedge funds as part of its series of proprietary reports designed to advance the dialogue around key themes and trends within the financial services industry.

The new Vision paper on hedge funds offers a comprehensive overview of the impact of rising institutional allocations to alternative investment vehicles and the implications of this trend for institutions and the hedge fund industry going forward. State Street’s report provides insightful explanations of hedge fund investing trends and techniques, as well as an in-depth analysis of the evolution of risk management, new developments in the pursuit of alpha, and a global review of hedge fund regulation.

"As part of the ongoing series designed to provide the industry with timely insights, this Vision paper responds to a need for greater understanding of all aspects of hedge fund investing," said Jay Hooley, vice chairman of State Street. "Given the results of our third institutional hedge fund study released last month, it is evident that institutional hedge fund investing is becoming less ‘alternative.’ We hope this new report will help industry professionals enhance their knowledge of hedge funds and navigate the risk and opportunities available in these important investment products."

The report draws on State Street’s extensive insights from across the company to bring a unique insight into the hedge fund industry.

State Street Global Advisors, State Street’s investment management arm, has two decades of absolute return investment expertise and offers an array of strategies focused on generating alpha.

Through its acquisition of International Fund Services (IFS) in 2002, State Street significantly expanded its global hedge fund servicing capabilities and now administers more than $200 billion in hedge fund assets from servicing centers in New York, Dublin, Luxembourg and Toronto.