Hedge-fund manager starts family office, shuns banks

Stephen Diggle, co-founder of hedge- fund firm Artradis Fund Management Pte, has set up a company to pool his personal wealth with that of family offices in Asia and invest in assets worldwide. Vulpes Investments will enable Diggle to diversify his personal assets by co-investing with other family offices “as far as possible independently of commercial financial service providers,” he said in an e-mail. Banks including Merrill Lynch & Co., Citigroup Inc., UBS AG and Morgan Stanley have been sued by Asian clients as the global financial crisis slashed client assets in the wealth management industry worldwide by 17 percent to $14.5 trillion in 2008, according to estimates by London-based Scorpio Partnership Ltd. “The breakdown of trust that has happened in the financial world post-2008 has created opportunities for wealthy families to work together in a collaborative way,” Diggle, who is based in Singapore, said on Oct. 15. The number of individuals with at least $1 million of investable assets in Asia-Pacific rose 26 percent to 3 million in 2009, matching Europe and almost overhauling North America’s 3.1 million, according to a report published in June by Capgemini SA and Merrill Lynch. Singapore-based GFIA Pte, which currently manages money exclusively for Diggle, is overseeing the family-office venture, he said. GFIA advises investors seeking to allocate money to hedge funds and announced it started a wealth management business in January. Diggle’s family office targets investments in operating businesses, agricultural assets, commercial and hospitality real estate, as well as private equity, he said. It also has a philanthropic component, Diggle said. Vulpes has co-invested with other families and private groups, said Peter Douglas, the principal of GFIA, declining to disclose the value of Diggle’s assets. It seeks to “offer its operating resources to a small number of families with similar values” and is in “advanced talks” with another family, Douglas said. Diggle said he will continue to run the Artradis Barracuda Fund, AB2 Fund and Russian Opportunities Fund. The Singapore- based hedge-fund firm manages about $850 million, compared with about $4.5 billion in January 2009.