Hong Kong's Galaxy Asset Management has closed its China Absolute Return Ucits hedge fund just 19 months after setting it up.
Launched in November 2010 with $30 million, the strategy was notable for being the first Ucits-compliant, China-focused hedge fund to be launched by an Asian manager. It is doubly notable for being the first known closure of a China Ucits hedge fund by such a manager.
It was shuttered at the end of May, a spokeswoman from Galaxy confirmed to AsianInvestor.
According to publicly available documents, the Greater China long/short equity fund was down -5.18% for the period of May 1-21, and -26.04% from inception to May 21. It traded stocks of Hong Kong, China and Taiwan-based companies.
Based on the firm’s Galaxy China Opportunities flagship fund, the Ucits offering was intended to capture European investor appetite for China growth exposure. In April last year, it was offered to Swedish investors through a number of platforms in the country.
However, European investment in Asian hedge funds has dropped off sharply in the past year due to the eurozone sovereign debt crisis, say industry executives. They note that attendance by European investor groups at recent capital-introduction events has been noticeably down from previous years.
Galaxy’s primary reason for closing the fund was to “change [the] platform we worked with to our own platform”, says the fund’s spokeswoman, without elaborating.
The fund – advised on by CIO and founder Joe Chan and managing director Johnson Cheung – was offered on Merchant Capital’s Dublin-domiciled Ucits platform after Galaxy decided against forming its own Ucits-compliant structure.
Other Asian firms to have set up Ucits funds include South Korea's Mirae Asset and Fullerton Fund Management in Singapore.