Hedge funds exit the Matrix as group unravels
Matrix Group, the UK-based financial firm seeking protection from creditors, is liquidating its hedge fund operations following an exodus of senior executives in recent months and a drop in performance and assets.
Those who have exited Matrix include its entire London-based Asia equity team, which was headed by veteran Asian hedge fund manager Rupert Foster.
It is a turnaround of events for Matrix, which two years ago had planned to establish a Hong Kong office by mid-2011 that would staff a small team of Asia-focused traders. Its Matrix Asia Fund – a long/short equity strategy – had double-digit returns in 2009-10, with a Ucits-compliant version launched in August 2010.
Signs that Matrix was about to unplug became evident last year when the Matrix Asia and Matrix Asia Ucits funds both suffered a performance loss of -10.7%. The combined AUM of the two funds was less than $100 million.
In September this year, Matrix decided to close its Ucits platform, which had four sub-funds, including the Asia Ucits offering, which was wound down in the same month. The Matrix Asia Fund, which was launched in 2008, was shut around the same time, as Foster and the rest of the Asia equity team departed from the firm.
The imminent wind-up of Matrix Alternative Asset Management is part of the break-up of the wider group, which as recently as last year managed $6.4 billion in AUM. Its clientele, which mostly comprised small and mid-sized companies, were adversely affected by the European sovereign debt crisis.
Matrix Group was placed under administration in the UK last week as it sought protection from creditors.
The only vehicle to endure the closure of Matrix’s alts arm is its fund of hedge funds unit, which is being acquired by Bermuda Global for an undisclosed sum.
Matrix’s sole surviving Asia-focused product is its Asian Property Income Fund, a London-based spokeswoman for the firm tells AsianInvestor. The vehicle falls under Matrix Asset Management, which is being spun out following a buy-out by the unit’s fund management and distribution teams.
The Asian Property Income Fund holds real estate assets in the region, in addtion to a postition in ARA Asian Asset Income Fund – a vehicle managed by Singapore-based manager ARA, according to fund documents.
The acquisition of Matrix’s FoHF fund unit and the liquidation of its hedge fund business is part of a widely expected global consolidation in the sector, brought on by greater institutionalisation of the investor base, which has shifted allocations to large fund managers.