In the second quarter, the former Asian head of the proprietary trading desk at Deutsche Bank AG’S Saba intends to launch Nine Masts Capital, a Hong Kong-based relative-value capital structure arbitrage hedge fund that will pursue a 15% annual after-fee return by exploiting mispriced Asian equity and credit market securities. The fund will invest in companies with secured, unsecured, senior, and subordinated securities as well as convertible bonds, credit default swaps, depositary receipts, equity options, loans, and common and preferred shares. According to a recent Businessweek article, the name “Nine Masts” comes from the Chinese explorer Zheng’s legendary treasure ships that he sailed on trips to Asia, Arabia, and Africa in the fifteenth century.
Nine Masts CIO and co-founder Wang Bing, previously the head of Saba Principal Strategies in Asia, left Deutsche Bank in December 2008 when Saba was terminated. Co-founder Ron Schachter was Mr. Wang’s Hong Kong Saba desk colleague in charge of part of the regional capital structure relative value investments. Nine Masts COO and co-founder Glyn Treasure was a business and risk manager for JP Morgan Chase & Co. and other investment banks. James Tu, senior portfolio manager and the last of the four cofounders, previously managed convertible bonds and volatility and equity arbitrage investments at DKR Oasis Management Co. since 2002 and a fixed-income fund at Merrill Lynch before that. Boaz Weinstein, the former head of the proprietary trading desk, left in 2009 with fifteen others from Deutsche Bank to launch Saba Capital Management LP in New York.
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