China's CITIC backs new fund set up by ex-FX Concepts execs

CITIC Capital Holdings Ltd, a unit of China's sovereign wealth fund, has invested in a new US-based asset management fund set up by former executives of bankrupt hedge fund FX Concepts, two sources familiar with the matter said on Wednesday.

The new fund will be run by Bob Savage, FX Concepts' former chief operating officer and chief strategist, and Ron DiRusso, the firm's co-chief investment officer and director of research. DiRusso had also managed FX Concepts' volatility fund, one of the few funds that performed well near the end of the firm's run.

CITIC Capital manages more than $4 billion in assets. Its primary owners are China Investment Corp, with assets of roughly $575 billion, and Citic Group Corp, China's largest conglomerate.

The sources did not indicate how much Citic has invested in the new outfit, but that it will "definitely manage money." The sources asked to be anonymous because they are not authorized to talk to the media.

Savage did not respond to emails and phone calls from Reuters, although late last year he said he would be part of a new venture in 2014.

Negotiations with Citic began as far back as February last year, one of the sources said, when FX Concepts was already floundering. FX Concepts was once the largest currency hedge fund in the world. At its peak in 2007, it managed $14 billion in assets.

Citic was offered the opportunity to invest in the new fund by DiRusso's Hong Kong-based contact, a former Goldman Sachs employee, one of the sources said. DiRusso and Savage had previously worked at the Wall Street firm at separate times.

It is not clear what type of fund Savage and DiRusso would manage. The same source said Savage and DiRusso's new firm intends to operate like a hedge fund, although it does not have quantitative models yet to back up its strategies.

The new outfit has also hired some of the junior employees of FX Concepts.