3 Asia-focused hedge funds join exodus

Market volatility battering industry; data shows 800 hedge funds shut globally last year

Lazard Asset Management, AMP Capital and Pine River Capital Management are the latest firms to shutter Asia-focused hedge funds.

The asset-management unit of financial firm Lazard closed its US$9.8 million (S$13.8 million) Lazard Asia ex-Japan Equity Strategy and the Singapore-based portfolio managers have left, the firm said in an e-mailed statement.

Separately, an 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.

Pine River closed a multi-strategy hedge fund in November after it failed to attract enough assets to justify keeping it going, according to a person familiar with the matter.

The Pine River Asia Fund, managed from Hong Kong, had gathered about US$120 million since its inception in 2004, said the person, who asked not to be named since the matter is private.

The business of running hedge funds has become more challenging as market volatility damps returns and tighter regulations increase 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.

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

AMP Capital managed A$160 billion (S$161 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.

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

Octagon Capital Management, a hedge fund firm started by former GIC executives, returned all outside money last month and converted to a family office.

Others to shut in Singapore include Piquant Capital, which closed its quantitative hedge fund late last year after failing to reach its targeted US$60 million in assets.

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


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A version of this article appeared in the print edition of The Straits Times on February 27, 2016, with the headline 3 Asia-focused hedge funds join exodus. Subscribe