(SINGAPORE) Galleon Asia, the hedge fund run by former DBS executives, may morph into another firm - one of various options being considered one week after its founder was arrested for insider trading.

'We're looking at all kinds of opportunities . . . one could be that we morph into another firm,' a source said.

Galleon Asia is beginning to see redemption requests, the source added.

Redemptions are expected to be orderly.

'I don't think there will be a panic. Most people understand the fund is in liquid strategies, not in private equity,' the source said. 'Returns this year are positive, in double digits,' he added.

Another source close to the company said Galleon Asia is looking for new investors to take over the existing operations.

It is not uncommon in the hedge fund industry for partners to start up elsewhere after they dissolve their firm. Hedge fund partners typically invest a chunk of their own money in the firm.

Galleon Asia opened its Singapore office in April last year and David Lau, who used to run DBS's global financial markets, joined in August to co-manage it with Justin Pollock.

The firm here, which employs 20 people, has assets of close to US$500 million, less than half of which is money from the founder and other partners.

In February this year, Frank Wong, former vice-chairman of DBS, was named chairman of Galleon Asia.

One option for Mr Lau and his partners here would be to manage their own money - though that wouldn't be half as exciting for someone who is used to dealing with substantial amounts of money.

When he ran DBS's trading room, Mr Lau would have dealt in billions of dollars, said a former colleague.

'Or Mr Lau could just decide to improve his golf handicap,' he quipped.

All the people in the Singapore office are said to be still reeling from the news that the group's founder Raj Rajaratnam was arrested last Friday and charged with insider trading by US federal investigators.

'I have decided that it is now in the best interest of our investors and employees to conduct an orderly wind-down of Galleon's funds while we explore various alternatives for our business,' Mr Rajaratnam said on Wednesday in a letter to investors and employees. 'At this important time, I want to reassure investors of the liquidity of our funds and assure Galleon employees that we are seeking the best way to keep (the team) together . . . '

The Government of Singapore Investment Corporation (GIC) is said to be an investor in Galleon Asia. GIC spokeswoman Jennifer Lewis said she had no comment on the matter.

In December 2006, reports said GIC and Galleon Partners had looked at buying a 20 per cent stake in Mumbai-based Edelweiss Capital for US$100 million.