China National Pension Fund Adviser Zhang Plans Hedge Fund‎

(June 1, 2010) — A top adviser to China’s $130 billion state pension fund and a former Asia prime brokerage head at Morgan Stanley are working together to start a China-focused hedge fund in September.

According to Bloomberg, Hong Kong-based JT Capital Management Ltd. is planning to raise $100 million for the fund. Chief Investment Officer Larry Zhang, formerly a partner at GSA Capital Partners in London who will be JT Capital’s co-chief executive officer, told Bloomberg that he will team up with Kurt Baker, who was previously at Morgan Stanley. The fund will trade Chinese stocks listed domestically or on an international exchange, such as Hong Kong or the U.S.

While China hedge fund managers have found it difficult to raise money from international firms increasingly worried about transparency and risk control, Zhang said in an interview with the news agency that he and Baker will team up to build an investment platform with local information access and high levels of transparency. At JT Capital, which will maintain a research office in Beijing, Zhang will be responsible for overseeing investments and Baker will head operations.

JT Capital will use research of macro-economic cycles, government policies and bottom-up fundamental analyses to pick stocks, Bloomberg reported, while short-selling single stocks listed internationally.