Singapore-based hedge fund Blue Rice to close, return money to investors

HONG KONG (Reuters) - Blue Rice Investment Management, founded in 2009 by the former chief investment officer for Korea Investment Corporation, Guan Ong, will return capital by the end of 2013, he told Reuters on Tuesday, adding to a growing list of fund closings in the region.

The shutdown is part of a shakeout in Asia where smaller-sized hedge funds are increasingly throwing in the towel as they struggle to attract money from risk-wary institutional investors, casting a cloud over prospects of the US$141 billion (S$175.7 billion) industry in the region.

As many as 263 Asian hedge funds have closed since the start of 2012, eclipsing the 262 launched during the period, according to data from industry tracker Eurekahedge.

"The world is going to be a bit more volatile," Mr Ong said."The way our funds are structured, we kind of feel that it's better for us to return investors' (capital) when investors are still up."

Singapore-based Blue Rice managed less than US$100 million in September in two fixed-income hedge funds, the BRIM Asian Short Duration Fund and BRIM Asian Credit Fund, according to marketing material obtained by Reuters.

"We have informed all our investors and we are in the process of unwinding all our positions," Mr Ong said.

Mr Ong declined to disclose details on the performance of his fund, but a letter sent to investors showed his BRIM Asian Credit Fund was down 1.5 per cent through end of September this year, following a gain of 8.5 per cent in 2012.

Mr Ong worked for the Korean sovereign wealth fund between 2006 and 2009 and when asked about his next career move, he said he was focused on unwinding the portfolio and it was too early to talk about his plans.