Pine River Shuts Asia Hedge Fund After Failing to Attract Assets

  • Pine River Asia Fund had gathered $120 million since inception
  • Fund returned an annualized 5.8% since start, 1.3% last year

Pine River Capital Management shuttered a hedge fund in Asia after it failed to attract enough assets to justify keeping it going, according to a person familiar with the matter.

The firm in November closed its Pine River Asia Fund, a multistrategy hedge fund managed from Hong Kong that had gathered about $120 million since its inception in 2004, said the person, who asked not to be named since the matter is private. The fund had returned 5.8 percent on an annualized basis since it started and advanced 1.3 percent in 2015, according to the person.

The shutdown adds to the closures of other hedge funds in the region as the business of running them has become more cumbersome. Market volatility has damped returns and tighter regulations are increasing costs for money managers. Investors are also shifting their money to the largest and most successful managers, prompting many smaller-scale firms to exit the business. More than 800 hedge funds closed globally last year in a trend that has been apparent for at least five years, according to data from Eurekahedge Pte.

Lazard Asset Management closed its $9.8 million Lazard Asia ex-Japan Equity Strategy and the Singapore-based portfolio managers have left, the firm said in an e-mailed statement. Separately, AMP Capital, the Australian asset manager with roots in real estate and infrastructure has shut down its AMP Capital Asia Quant Fund, which held about $104 million, after the December departure of its team focusing on the strategy, according to an e-mailed statement.

Pine River, based in Minnetonka, Minnesota, is best known for profiting from bets on mortgage-backed securities after the financial crisis in the U.S. Hedge fund firms often trim businesses that aren’t central to their businesses amid volatile markets. Pine River last year also cut a Hong Kong-based team that traded emerging-market currencies, people with knowledge of the matter said at the time.

Pine River, which has offices in Hong Kong, Beijing and Shenzhen, still manages a China-focused fund with about $1.2 billion in assets as of January.

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