Hong Kong’s Triskele to Shut Hedge Funds After Assets ShrankBei Hu
Triskele Capital Management Ltd., with more than $600 million assets at its peak, decided to close its two hedge funds after investment losses and investor redemptions, said Chief Investment Officer Tsuyoshi Shiba.
Triskele, based in Hong Kong, recently notified investors of the decision after assets shrank to about $132 million, Shiba said. The Triskele China Fund, which invests in equities, lost about 9 percent last year, Shiba said. It has not been decided whether the management company will be closed down, he added.
Politics-driven markets have made it harder for fundamental stock-pickers to make money and investors cut equity holdings in favor of the fixed-income market, forcing some Asian managers to shut hedge funds. About 860 hedge funds closed globally last year, the highest since the 2008 financial crisis, according to Singapore-based data provider Eurekahedge Pte.
“The China fund did not do that good in the past two years,” Shiba said in a telephone interview. “We had some negative return last year so some investors lost patience.”
Triskele also decided to close the about $12 million Triskele CB Fund, even as it generated positive return, because of its small size, he added.
Triskele was co-founded by Chief Executive Officer Otto Chan and Shiba in 2006, according to a May 2011 marketing document. Chan was the head of Hong Kong and China equity sales at HSBC Holdings Plc before setting up Triskele. Shiba, born in the Chinese city of Shanghai, helped set up what later became the largest China fund in Japan with assets over $1 billion for Sumitomo Mitsui Asset Management Co., according to the document.
Triskele China fund, which started trading in late May 2007, mainly invests in companies with growth potential in Hong Kong, China and Taiwan, the document showed. It returned 52 percent in 2007, 38 percent in 2009 and had only two annual losses in its history, including a 9.6 percent decline in 2011, according to the marketing document and data compiled by Bloomberg.
The fund lost 10.5 percent in the first 11 months of last year, according to data compiled by Bloomberg. The fund’s assets declined 73 percent from the late July 2011 peak of $606 million to $164 million by November, the Bloomberg data showed.
The fund was hurt by its investments in yuan- and foreign-currency-denominated shares listed in China in the last two years, Shiba said. Investors also favored fixed-income securities over stocks, he added.
The Shanghai Composite Index, which groups yuan and foreign currency shares quoted on the city’s exchange, lost 29 percent in the 23 months to November before a 15 percent rebound in December after China’s leadership changes.
The Triskele CB Fund, which invests in convertible securities sold by companies in Asia outside of Japan, returned 4 percent in the first 10 months last year, according to Bloomberg data.