Stark hedge fund confirms Asia team spin-off

* Stark to transfer ownership on Oct 31

* Spinoff decision was mutual

HONG KONG, Oct 30 - Stark Investments confirmed on Friday that two of its senior Asia managers would quit the hedge fund, taking the firm's Hong Kong and Singapore operations with them.

Stuart Wilson and Teall Edds, both principles at the Milwaukee-based hedge fund, are taking more than two dozen employees with them to launch Orchard Capital Partners, sources told Reuters on Thursday. [ID:nSP377762]

Stark has more than $10 billion under management, according to reports early in 2009.

"The decision was mutual and executed to position Stark to best achieve its investment mandate of concentrating primarily on liquid strategies and away from investing in private transactions," said Stark Investments in a statement.

Wilson and Edds were unavailable for comment.

Orchard will be involved in managing about $1 billion of Stark's investments in Asia and take over assets worth around $500 million in Stark's Asia funds, said sources.

The fund said it would transfer ownership to Wilson and Edds by October 31. Wilson joined Stark in 1997, before which he was part of the Asian trading team at Citadel Investment Group. Edds joined the firm in 2003 from Credit Suisse, where he was the regional head of credit at its financial products division in Hong Kong.

Stark Investments, founded by Brian Stark and Mike Roth in 1992, said Asia would continue to be an investor focus point and an important portfolio component.