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16 Jan 2009

HK Fund to team up with Paulson Hedge Fund in Offshore Launch

One of Hong Kong’s largest independent financial institutions, Sun Hung Kai Financial, is teaming up with hedge fund Paulson & Co, launching a distressed asset investment fund, according to a Reuters report.

John Paulson will act as the new $100 million offshore fund's investment manager. The fund will only be open to professional investors and will feed into Paulson’s existing “recovery fund”, which invests in distressed financial assets, according to the report.

With approximately $29 billion in assets under management Paulson hedge fund has offices in New York, London and Hong Kong. Sun Hung Kai has over HK$50 billion ($6.45 billion) in assets under management, together, the funds plan to invest globally, but are focused mainly on the United States.

Rizal Wijono, Managing Director at SHK Fund Management Limited, the Sun Hung Kai's asset management business said, “There is a lot of turmoil in the U.S., which is Paulson’s home market. They’ve been looking at a approximately 100 financial institutions who they think are going to be the survivors and the failures,” he said, “To date, they’re looking into Asia, but they haven’t identified potential positions yet. If you’re looking for maximum appreciation, the obvious place is the developed world.”

Bankrupt Tulsa Execs Receive Over $3 Milllion in Bonuses

A pair of SemGroup LP executives are the only two administrators named to receive bonuses from both the bankrupt Tulsa company and its publicly held and struggling subsidiary, SemGroup Energy Partners LP, first reported Thursday.

Pete Schwiering and Jerry Parsons were named among 10 SemGroup LP leaders slated to receive up to $3.8 million in combined incentives if the Tulsa-based company meets or exceeds certain criteria, according to bankruptcy court records in Delaware. The incentives are designed to keep employees on board while SemGroup LP sells off assets or emerges from Chapter 11 protection.

Schwiering and Parsons both could gain up to $468,750 in additional pay under the SemGroup LP incentive plan. Schwiering heads up SemCrude oil operations, while Parsons leads the company's SemMaterials asphalt unit.

Last month, SemGroup Energy Partners' compensation committee approved bonus pay for five executives, including CEO Kevin Foxx, Schwiering and Parsons, according to a Securities and Exchange Commission filing.

Parsons' bonus pay for his SGLP asphalt work totaled $215,000, while Schwiering received an additional $120,000 for leading the public company's crude oil operations, according to reports.

The parent SemGroup filed for bankruptcy protection July 22 after admitting its traders lost $2.4 billion in failed oil futures transactions. The company also owes $2.5 billion to banks and other lenders and up to $1 billion to oil and gas producers who sold their product on credit, according to reports.

Hedge funds Manchester Securities and Alerian Capital Management gained SGLP board control when the parent company defaulted on a $150 million loan, and the public firm tried to find other, third-party customers for its storage and pipeline services.

SemGroup Energy Partners is not a debtor in the bankruptcy case, but it suffers from its own credit default and cash-flow challenges, records show. Schwiering has worked for SemGroup since 2000, the year that it was founded. Parsons joined SemGroup in 2006. Neither SemGroup LP or SGLP spokesmen could be reached for comment.