L&R Capital, the Hong Kong-based credit hedge fund, has hired Larry Chi, the former head of corporate banking and securities for China at Deutsche Bank.

Chi will join this month as partner at the firm, which was established last year by former Nomura Global Capital Management portfolio manager Ran Li, and which runs $350m. The Asia-focused credit strategy has delivered a high-single digit return in the first nine months of the year.

According to Li, Chi will help raise the profile of L&R and the team expects the strategy will receive more inflows from several allocators.

Prior to Deutsche Bank, Chi was the head of greater China Fixed Income and head of the Asia Fixed Income general sales team at Morgan Stanley.

Li told AsiaHedge that Asia continues to provide significant opportunities in fixed income and credit, notwithstanding the uncertainty gripping the region due to rising US interest rates and volatility in emerging market fixed income products.

Li said credit managers this year faced a very difficult rates and credit cycle, so that bottom up credit selection and fundamental research are increasingly important.

“If you run a highly levered long-only portfolio with no solid credit differentiating skillsets then it is a very tough one but if you know how to position using long/short credit strategies and dynamic hedging tools, you’ll do very well in this part of the cycle,” she said.

Li said L&R’s strategy since the start was always 80-90% focused on Asia credits but also invests in global emerging markets, adding that the plan is to hire two more portfolio managers to focus on non-China and non-Asia opportunities in years to come.

Deutsche Bank’s top China banker joins L&R on AsiaHedge.