Lazard shuts Singapore-run hedge fund in rising wave of Asia-focused closures

SINGAPORE (BLOOMBERG) - Lazard Asset Management and AMP Capital are the latest firms to shutter Asia-focused hedge funds.

The asset-management unit of financial firm Lazard closed its US$9.8 million Lazard Asia ex-Japan Equity Strategy and the Singapore-based portfolio managers have left, the firm said in an e-mailed statement.

Octagon Capital Management Pte, a hedge fund firm started by former GIC executives, returned all outside money last month and converted to a family office. Other funds to shut in Singapore include Piquant Capital Pte, which closed its quantitative hedge fund late last year after failing to reach its targeted US$60 million in assets.

Separately, the Australian asset manager with roots in real estate and infrastructure has shut down its AMP Capital Asia Quant Fund, which held about US$104 million, after the December departure of its team focusing on the strategy, according to an e-mailed statement.

The business of running hedge funds has become more challenging as market volatility has damped returns and tighter regulations are increasing costs for money managers. Investors are also shifting their money to the largest and most successful managers, prompting many smaller-scale firms to exit the business.

More than 800 hedge funds closed globally last year in a trend that has been apparent for at least five years, according to data from Eurekahedge Pte.

"Especially in Asia, the hedge fund landscape has become more competitive, which makes it more difficult to raise funds," said Will Tan, a managing director at Singapore-based recruitment company Principle Partners Pte. "There are just a lot more funds to chose from."

Across its businesses, AMP Capital managed A$160 billion as of Dec 31, according to its website. The firm announced in May 2014 that it was opening the market-neutral hedge fund with US$25 million of assets, focused on equity long-short investing in Australia, Hong Kong, Singapore, Taiwan and South Korea. The fund sought to appeal to family offices, pension and state funds, AMP Capital said at the time.

The fund returned 7.2 per cent on an annualized basis since its inception, according to AMP spokeswoman Lara Evans. The decision to shut the fund was related to the departure of the team and not to the fund's returns, she said in an e-mail.

Outside Asia, Michael Platt's BlueCrest Capital Management, Doug Hirsch's Seneca Capital Investments, Scott Bommer's SAB Capital Management and Martin Taylor and Nick Barnes's Nevsky Capital are among firms that have shut down or returned outside capital amid rising costs industrywide and shrinking returns.