Tiger Asia Management LLC, the $1.2 billion New York-based hedge fund run by Bill Hwang, said it’s returning outside capital to investors by the end of the month amid a three-year probe by Hong Kong regulators.
“After much consideration, and due largely to a prolonged legal situation, I have decided to return outside capital to investors effective at the end of the month,” Hwang wrote in a letter to investors yesterday. The fund, founded in January 2001, has produced annual returns averaging 16 percent since inception.
Hong Kong’s Securities and Futures Commission alleges the New York-based hedge fund traded on inside information from bankers arranging placements of China Construction Bank Corp. and Bank of China Ltd. shares in 2008 and 2009, pocketing HK$38.5 million ($5 million). Tiger Asia, which has no employees and physical presence in Hong Kong, denied the allegations in an Oct. 12, 2010, letter to investors.
The firm told clients later that month that it had received a subpoena from the U.S. Securities and Exchange Commission following the allegations by the Hong Kong regulator.
Shawn Pattison, a spokesman for the fund, declined to comment beyond the letter.
Hwang is continuing to work to resolve these matters, he said in the letter. Tiger Asia will become a family office and continue to invest in Chinese, Japanese and Korean markets.
Most of the employees will continue to work with Hwang, he said. Several analysts are leaving to set up a new Asia-focused fund, according to Hwang.
Hwang earned an undergraduate degree in economics from the University of California, Los Angeles and a master’s in business administration from Carnegie Mellon University in Pittsburgh.
In the early 1990s, he was an institutional stock salesman at Hyundai Securities Co., where he dealt with Julian Robertson’s Tiger Management LLC. Robertson, a pioneer and mentor in the hedge-fund industry, hired him in 1995 after Hwang won an prize -- $50,000 given to the philanthropy of the winner’s choice -- awarded annually to the person outside of Tiger who had contributed most to the fund’s success.