Daewoo spins off prop team as South Mountain with $50m seeding

March 14, 2014  

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South Korea’s Daewoo Securities has spun-off its proprietary trading desk in Hong Kong as a new hedge fund operation named South Mountain Asset Management, and is understood to be seeding the start-up with at least $50 million.

The word on the street is that Stacey Hahn Sull – the former CEO of one of Korea’s largest asset managers, Cosmo Asset Management – could be brought in as the firm’s CIO and CEO. However, a source at South Mountain said a decision on that has yet to be confirmed.

Daewoo Securities, a subsidiary of the KDB Financial Group, is the second largest brokerage and investment banking group in Korea terms of capitalisation, ranking just under Samsung Securities.

South Mountain is understood to be positioning itself to become either an equity long/short specialist or a multi-strategy vehicle investing in various types of asset classes. It has already applied to the Hong Kong Securities and Futures Commission for a licence.

The new team comes from two strategy groups at Daewoo – focused on equity and multi-asset strategy, respectively – that have traded internal capital for the firm in Hong Kong with excellent returns for a number of years. The equity team had two portfolio managers while the multi-asset team had one, all of whom will migrate to South Mountain.

Prior to Cosmo, Sull founded and ran Oojoo Capital Partners, which ran a largely directional long/short Asian equity fund with a bias towards Korea, as well as having exposure in Japan, Taiwan, Singapore and Thailand. Before Oojoo, Sull managed over $2 billion in long-only portfolios at Morgan Stanley Investment Management in Singapore.

South Mountain is understood to have taken an office at the swanky IFC building in Hong Kong’s central business district and appointed Goldman Sachs as its sole prime broker.

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