New York-based Alkeon Capital Management LLC's Asia hedge fund surged 26 percent in October, its biggest monthly gain since it was launched in 2007, an investor letter showed.
By comparison, the MSCI AC Asia index rose 6 percent during the month. The Eurekahedge Asia Long/Short Equities index was up 2.6 percent.
The fund, Alkeon Asia Growth LP, benefited from positive performance in long positions and bets on technology and consumer discretionary sectors, founder and Chief Investment Officer Takis Sparaggis wrote to investors.
The return marks a turnaround for the hedge fund, which had recorded its worst monthly loss of 27.3 percent in September as its long investment portfolio in the consumer discretionary sector in China suffered.
In October, the portfolio had positive returns in Hong Kong and negative results in Japan and Taiwan, Sparaggis, who was earlier a portfolio manager at CIBC Oppenheimer Asset Management, wrote to investors.
Our confidence in the investment attractiveness of the region remains very strong, despite the recently elevated market volatility, and is based on a unique combination of positive investment drivers, he said.
Sparaggis, who has a PhD in electrical and computer engineering and an MBA from the University of Massachusetts, spun out of CIBC Oppenheimer in 2002 to set up Alkeon.
The hedge fund executive said state balance sheets and currencies in Asia remained strong and superior to those of most developed western economies, while growth was the highest in the world, particularly in the consumer segment.
Government policy was sensible and proactive in the monetary and fiscal areas and valuations were attractive, particularly Chinese equities which a few weeks ago traded at a price-to-book multiple that fell below the 2008/2009 trough level, Sparaggis wrote.
Alkeon Capital Management had a total fund value of $2.8 billion, its August 13F filings showed, in which large investors are required to report their holdings of U.S.-listed securities at the end of each quarter.
The Alkeon Asia Growth fund, which manages about $50 million, was down 2.9 percent up to end of October.
The firm had exposure to companies such as top Chinese search engine Baidu Inc , 51job, Inc., E-House (China) Holdings Ltd and Chinese online game company NetEase.com Inc , according to the 13F filing.
An e-mail to Alkeon Capital Management partners Alex Tahsili and Keith Davey was unanswered.