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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (4293)	6/9/1998 5:14:00 AM
From: Stitch	Read Replies (1) \| Respond to of 9980

Lawrence; APM? Well... every dog has his day. And I was speaking for myself.. I like to use the "regal" we. <Still grinning> By the way..spell out dollar diplomacy for me. Just a rough view. best, Stitch

To: Frodo Baxter who wrote (4293)	6/9/1998 5:35:00 AM
From: Stitch	Respond to of 9980

Gee Whiz, Looks like Bill Hambrecht knows (or at least feels) something I don't know (or feel). Hambrecht & Quist Founder Bets on Asian Stock Recovery By ROBERT MCGOUGH Staff Reporter of THE WALL STREET JOURNAL William Hambrecht, who founded an investment bank that financed some of Silicon Valley's brightest lights, is making an indirect bet on a recovery in battered Asian stocks: He bought nearly 25% of Matthews International Capital Management, a mutual-fund firm that specializes in Asia. It takes a bold investor to wager on Asia now. Mutual-fund investors have been pulling money out of Asian funds, horrified by heavy losses in the past year. And some U.S. fund firms are hurting. At least one fund-management firm has apparently bailed its money-market fund out of a money-losing Korean investment. Mr. Hambrecht, the retired chairman and a co-founder of Hambrecht & Quist, an investment bank specializing in high-tech companies, bought a 24.9% interest in Matthews International, a San Francisco money manager. Matthews says the investment is a personal one by Mr. Hambrecht, who will increase his stake to 30.4% of the firm if the mutual funds' board and investors approve. Matthews International manages $150 million in four mutual funds. It's one of the few independent U.S. fund firms that specialize in Asian investments. Matthews wouldn't disclose the precise value of the Hambrecht investment. But applying a broad benchmark valuing stock mutual-fund management firms at 5% of assets under management, Mr. Hambrecht's investment could be around $2 million, a price that Matthews dosn't dispute. Mr. Hambrecht's investment comes as signs are emerging that U.S. money funds may have been stung by the Asian crisis. Harris Insight Funds Money Market Fund, a $1.9 billion money fund in Chicago, disclosed in a filing that its management firm bought back a security from its money fund. The management firm made good on a $1.47 million loss to the fund on the security, according to the filing. IBC's Money Fund Report, Ashland, Mass., believes the security was issued by Industrial Bank of Korea, which Harris Insight reported holding on June 30. Harris Insight declined to comment. Mutual-fund management firms often buy money-losing paper back from their money funds in order to prevent them from dropping below $1 net asset value, or "breaking the buck." Peter Crane, managing editor at IBC, said the Industrial Bank of Korea issue hadn't defaulted, but that its credit quality had dropped below the level that money funds are required to buy, and that the security had declined in price. Mr. Crane didn't think the Korean security alone would have caused the Harris Insight fund to break the buck. But he thinks other money funds will report bailouts of Korean securities. Matthews International doesn't manage a money fund. Mr. Hambrecht isn't the only well-heeled investor who has been bottom-fishing in Asia's speculative waters. Late last year, Sir John Templeton invested an estimated $10 million in Matthews Korea Fund after the fund plunged in value along with the Korean stock market and currency. Sir John, who founded the Templeton mutual funds but is now a private investor, also recently disclosed a 10% stake in Regent Pacific Group Ltd., a Hong Kong money-management firm. In the past 12 months, Matthews Korea has declined more than 60%, according to data from Morningstar Inc. In a recent interview, Sir John didn't argue with conjecture that his Korean investments haven't fared well yet. Unlike Sir John, Mr. Hambrecht is investing in a U.S. fund-management company, rather than in an Asian money manager or in a mutual fund that invests directly in Asian stocks. However, the fortunes of Matthews International will undoubtedly prosper or shrink with the Asian market. Mr. Hambrecht was traveling and couldn't be reached to comment. Paul Matthews, president of Matthews International, said Mr. Hambrecht "believes in the long-term future of Asia, but he also believes in the long-term future of the mutual-fund business."