APS China Hedge Funds Rose in November as Global Peers Stumbled

  • Greater China Fund rose 2.5%, extending annual gain to 41%
  • Hedge fund's bet on Beijing Venustech helped boost returns

APS Asset Management Pte’s long-short China hedge fund advanced last month to bring its returns this year to more than 41 percent, ranking it among Asia’s top performers as many global peers have stumbled.

The Greater China Long/Short Fund rose 2.5 percent last month through Nov. 20, helped by stock bets including Beijing Venustech Inc., the Singapore-based money manager said in an e-mailed statement. Through the end of October, the $95 million fund was the second-best performer among all long-short equity funds investing in China, according to Eurekahedge Pte, which hasn’t yet disclosed November data. Other funds managed by APS, including a China A-shares strategy with $2.3 billion in assets, also outperformed peers.

APS is among Asian hedge-fund managers outperforming peers in the U.S., where some of the industry’s most savvy investors have been stymied by losses amid global market volatility. The Eurekahedge North America Hedge Fund index returned 0.5 percent through the end of November, about 6 percentage points less than the gauge measuring the performance of Asia’s funds, according to Singapore-based data provider Eurekahedge.

“Asian markets are inefficient and therefore it has been easier for Asian managers to find both long and short alpha ideas,” APS founder and Chief Investment Officer Wong Kok Hoi said in an e-mailed statement. “Asian alphas have been steadier and markedly stronger,” he said, referring to the returns that beat benchmarks.

Veterans Struggle

Hedge-fund investors, especially those that offer macro strategies or funds that bet on rising stocks, have struggled this year as signs of slowing growth in China spurred price swings around the globe. Firms such as David Einhorn’s Greenlight Capital and Bill Ackman’s Pershing Square Capital Management are among those with losses this year.

APS’s China-focused funds have beaten the 12.2 percent advance of the Shanghai Composite Index through Nov. 20, helped by information-security provider Beijing Venustech, which has gained about 125 percent this year. The APS China A Share Fund returned 2.6 percent last month through Nov. 20, which brings its year-to-date gains to 23.3 percent, according to the statement.

Even after recent volatility and amid a lowered outlook for economic growth, the prospects for the stock market in the world’s second-biggest economy look good, Wong said. He reiterated his optimism on the CSI 300 Index, saying that the index might reach 7,000 within the next five years, up from Wednesday’s close of about 3,750. Stocks’ advances could be impeded by global economic stagnation and sharply rising interest rates, he said. In China, they could be curtailed by banks’ non-performing loans, unemployment and political instability, Wong added.

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