HONG KONG - Kuark Capital, a fund manager based in Hong Kong and headed by Taiwanese investor Kyle Su, has secured at least $400 million ahead of the initial launch of a new hedge fund that will target Asian technology stocks linked to artificial intelligence, according to people familiar with the matter.
The fund will concentrate its investments in Taiwan and Japan and adopt a low-net-equity long-short approach, seeking returns from both long and short positions while keeping net market exposure restrained. One of the sources said the manager had locked in the minimum $400 million prior to the fund's commencement. All three people declined to be named because they were not authorized to speak publicly. Su did not respond to requests for comment.
The timing of Kuark's debut coincides with a pronounced rally in technology equities across the region - from China to South Korea - that has heightened demand among investors for exposure to AI-related companies. Market participants cited the region's important place within the AI supply chain - from chip fabrication through to packaging and materials - as a key driver of investor attention.
Institutional allocators have been scanning Asia for what they view as undervalued opportunities to boost returns. Data from Morgan Stanley prime brokerage showed that Asia equity long-short funds, on average, returned about 10% in the first four months of the year, ahead of the 5.2% average gain reported globally. The data also indicated that the prominence of semiconductor stocks within Asia-focused long-short strategies played a significant role in that outperformance.
Kuark's planned low-net strategy is consistent with a broader shift among hedge funds toward structures that emphasize downside protection. Market participants said such strategies have attracted attention in recent years because they aim to limit overall market exposure and shield portfolios from wider volatility while allowing managers to express both bullish and bearish views.
According to a Kuark investor presentation reviewed by one of the sources, Su previously managed an equity portfolio of roughly $1 billion during a near nine-year tenure at Kadensa Capital, a Hong Kong-based hedge fund with an Asian investment focus. The presentation also highlighted Kuark's local networks in Taiwan and Japan and Su's engineering background as competitive advantages for sourcing regional investment ideas.
Kuark has appointed Hiro Ikeda as director of research. Ikeda, described in the firm's presentation as a Japanese-Taiwanese investor with prior roles at Optimas Capital, Fidelity and T. Rowe Price, is noted to have managed a low-net mandate for Optimas in Hong Kong for four years. The presentation states that Optimas received an allocation from New York-based hedge fund Millennium Management last year. Ikeda did not respond to requests for comment.
Context and implications
The fund's focus on Taiwan and Japan aligns with investor interest in companies integral to AI hardware and supporting services. By using a low-net-equity long-short structure, Kuark intends to balance directional bets with hedging to manage market exposure.
Reporting limitations
Details about the fund's final size, fee structure, specific target allocations, and the launch date were not provided by the sources. The information presented here is based on people familiar with the matter and an investor presentation seen by one source.