For almost two decades, Danny Yong was a hedge fund star used to winning. After stints at global giants including Citadel and Goldman Sachs Group Inc., he co-founded his own firm that soon became a powerhouse in Asia. Double-digit returns were common in those heady days.

But in 2019, after three straight years of getting crushed by the markets, Yong was forced to answer two probing questions faced by many high-octane traders: Had he lost his touch? And was it time to quit?

“It forced me to be more brutally honest with myself and say ‘dude, it’s time to hang up your hat as a trader,’” Yong said in an interview from his Singapore office.

While many of his peers keep trading until the money runs out — or return what’s left to clients — Yong chose a humbler path. He stepped back from the wheel and Dymon Asia Capital Pte rolled its hedge fund operations into a multi-manager platform where his colleagues make the investment calls and he plays coach.

That decision to park his ego has led to a dramatic turnaround. The $3.5 billion fund posted an 8% return this year through May, topping flagship funds at larger global peers including Schonfeld Strategic Advisors and Millennium Management, according to people familiar with the matter. Last year it was up 17%, ahead of similar funds at Millennium and Balyasny Asset Management.

Clients have committed to inject at least $1.5 billion more by the end of 2026, with investors from Europe, Canada and the Middle East looking to Asia to diversify away from the US as Donald Trump’s trade wars rage.

“The allergy to China, thanks to Trump, is going away,” Yong said.

Multi-strategy platforms where managers run their own investing pods are hardly new. Some 55 of these firms nearly tripled their combined assets over six years to $368 billion, prime brokers at Goldman Sachs wrote in a 2023 report. Much of that funding has flowed to a few giants. Millennium Management, Citadel, Point72, Balyasny and ExodusPoint Capital Management manage more than $200 billion combined.

Yet these platforms remain rare in Asia, especially among funds with more than $1 billion in assets under management. Across the region, hedge funds taking bullish and bearish bets on stocks, often from a single country, still command the vast majority of assets.

For Dymon, Asia accounts for 90% of exposure, while two-thirds of clients are from the region. Its 70 portfolio managers are in Singapore, Shanghai, Hong Kong and Mumbai, and last year the firm expanded its team in Japan and opened an office in Dubai.

“Asia is everything — we cannot shut any part of Asia when I wake up on the wrong side of the bed because it’s all that we do,” Yong said.

Yong, 53, has been forced to overcome adversity since an early age after losing his father at 10. His mother urged him not to let anyone pity him, and by 15, he’d decided to get rich by excelling at everything he could. His competitive streak and raw talent got him onto Singapore’s national badminton team at 17, while earning strong grades at school.

After graduating from Nanyang Technological University, he took several finance jobs including trading currency and interest rate derivatives at what’s now JPMorgan Chase & Co. and Goldman Sachs, before leading Citadel’s Asia macro trading team.

By 2008, he was ready to branch out on his own, co-founding the macro hedge fund that would eventually become Dymon — with most of its initial $113 million in funding from Paul Tudor Jones’s investment firm.

The years that followed were hard but rewarding. When markets punished him, he worked harder — keeping a pillow in his office and trading on two hours’ sleep. For a while it worked, as the fund made 15% to 21% annual returns in four of its first seven years. The firm expanded to include a private equity arm and a multi-manager equity fund. Fortunes Turned.

But from 2017, Yong’s fortunes started to turn. Strategies that should have worked faltered during the first Trump presidency, and no amount of grit could turn things around. For the next three years, the macro fund declined 4% on average, he said.

“It took me three years of eating humble pie, working our ass off with nothing to show” for it, he said. “That’s when we realized that this isn’t very sustainable.”

Yong concluded that for all their bravado, the majority of hedge fund managers are a product of their “vintage” years, eventually losing their market-beating edge. In his own case, having started trading months before the 1997 Asian financial crisis and living through the dot-com bubble and 2008 crash, he tends to view markets through a bearish lens.

“I was always rewarded for positioning for the black swan events and always believing that risk premiums were underpriced,” he said.

That was ill-suited for the bull markets in the roaring quantitative easing years that followed the financial crisis, or the heady years of Trump’s first presidency when markets rose regardless of the headlines.

Yong’s solution was to create what he calls “a money-making machine” — a multi-strategy, multi-manager platform aiming to generate profits in all markets, mimicking the global hedge fund giants. In baseball parlance, Yong would be a coach, trying to get the most out of whichever player is at the plate.

“I’m not dependent on anybody,” he said, noting that even his winning managers will eventually hit a dry spell. “Then I have another and another and another, and this is the way that I can stay invested, trying to generate 15% to 20% returns for the next 20 to 30 years.”

Many of Dymon’s early clients had signed up for Yong’s macro trading, so about half took their money and left during the transition. (Ironically his macro strategy was up 37% in the last three months of its existence.)

Platform players, also known as pod shops, rely on two key elements to win: the talent of the portfolio managers and having enough money to fuel their strategies. Each lead manager is allowed to hire a team and run their strategy — hence the “pods” moniker. In recent years, the proliferation of pods has led to a talent war, with some star traders offered millions of dollars just to sign on.

Dymon can’t compete with Millennium and the other deep-pocketed giants in the region, so Yong talks up the “Dymonite” culture, where collaboration is key and new hires are like family. The company’s LinkedIn posts feature staff kayaking, sharing meals and even cleaning dog poop at animal shelters. A bigger draw is that Dymon’s Asia base allows managers in Singapore or Hong Kong to make big calls without waiting for approval from London or New York. With that as a selling point, Dymon hasn’t lost any profitable portfolio managers to poaching within the last two years, a spokesperson said.

That’s not to say there’s no churn. In most years, as many as a fifth of its investment staff leave. In most cases, it’s because they failed to make money at the end of their two-year contracts.

“Are we nicer or more patient?” Yong asks. “No, we’re not.

But we’re more transparent, we are more predictable and we stick to what we promise.”

Dymon partner Nilay Patel, a Millennium alumnus, credits Yong’s guidance for some of his current success, from putting on right-sized trades to focusing on his core strengths and seeing a professional trading coach.

“He can put pressure on PMs to perform if he thinks what’s driving the under-performance is either laziness or something where they’re not pushing themselves,” Patel said.

To attract the capital needed to execute its strategies, Dymon introduced a fee structure in which investors aren’t charged performance levies until they’ve pocketed at least a 5% return for the year. While the so-called “hurdle rates” are common among private equity funds, Dymon was an Asian pioneer in granting them to entire groups of hedge fund clients.

“The use of hurdles in their structure was unheard of when they first announced that” in Asia, said Marlon Sanchez, founder of hedge fund research firm Skyway Pacific Research & Capital Management in Hong Kong.

Sanchez said recent market turbulence has created more trading opportunities in Asia. But he also warned that new investors who are unfamiliar with the region may find its inherent volatility more of an obstacle than an opportunity.

“Multi-manager platforms dedicated to Asia, like Dymon, are probably in a very good position to take full advantage of the nuances in our region,” he said.

As the afternoon sun dips towards the Singapore Strait outside Dymon’s boardroom window, Yong reflects on his decades in the Asia hedge fund space. While the turmoil has returned to levels that could suit him, he’s staying away from the wheel. He’s finally getting some sleep and spending more time with his five children.

“I’m not going back to trading anymore — it just doesn’t make sense,” he said. “Clients have been asking but I say ‘no, I’m done — my value to you is spotting the next Danny Yong.’”

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