Morgan Stanley will acquire a significant minority stake in Abax Global Capital, a hedge fund being set up in Hong Kong. Erica Platt, a spokeswoman for Morgan Stanley, said the company is not disclosing terms of the deal.
The fund will invest in Asian special situations, using public and private securities, with a focus on China, according to a Morgan Stanley news release. Abaxs founding partners are ex-Citadel employees Chris Hsu, who was managing director with responsibility for the firms Asia special situations group, and Frank Qian, a trader and risk manager. The third founding partner is Donald Yang, formerly a Merrill Lynch managing director who headed the firms Hong Kong and greater China debt capital markets business. Bryan Locke, a Citadel spokesman, did not return a call requesting information about replacements for Messrs. Hsu and Qian. Terez Hanhan, a Merrill Lynch spokeswoman, was unable to provide information about Mr. Yangs replacement by press time.