The market rout of 2011 continues to take its toll on Asia-focused hedge funds in the region, with UK asset management giant Henderson Global Investors shuttering its Asia-Pacific Equity Multi-Strategy Fund, while Tantallon Capital is winding up its long-only Bass Rock Fund.
Henderson’s Asia-Pacific Equity Multi-Strategy Fund, which was launched in 2006 and run by a team of three managers, was closed on February 23 with about $30 million in AUM.
A spokeswoman from Henderson, which manages $100 billion in assets, noted that “though it had a good track record and management team we had been unable to raise AUM in what has been a challenging, risk-averse environment”.
Singapore-based Tantallon – which has $300 million in AUM across a series of Asian and emerging markets-focused funds – confirmed that its Bass Rock Fund was in the winding-up phase, but declined to provide further comment. Launched in 2007, the Asia-Pacific ex-Japan strategy had about $14 million in AUM as of last year.
The cost of running hedge funds has increased sharply in the post-crisis era due in part to the need for greater risk controls and growing demand for institutional-grade platforms by investors. As a result, smaller funds are now more vulnerable to closure when their income becomes outweighed by operational costs.
According to Singapore-based data provider Eurekahedge, there were 127 hedge fund closures in Asia last year, up slightly from 125 in 2010.
Macquarie Funds Group and Hong Kong-based Pinpoint Asset Management have also recently made moves to cope with the difficult environment for hedge funds.
Macquarie Special Events Fund, an event-driven strategy launched in 2003, was wound-up at the end of January, with $50 million in assets. In a statement to investors, Macquarie Funds Group said it could “no longer be managed in a cost-efficient manner without significantly increasing the management fee”, leading it to close the fund and return money to investors.
Meanwhile, Pinpoint – which runs a range of China-focused funds – liquidated its Rising Commodity Fund on January 1, with “almost all of the liquidation proceeds subscribed to the Pinpoint Multi-Strategy Fund, which has commodity futures investments”, according to Yongshan Duanmu, the firm’s managing director.