Ex-SAC Manager's Asia Hedge Fund Said to Lose Third of Assets

  • BosValen Asset's hedge fund is led by Ken Xu in Hong Kong
  • Assets said to fall because of investment losses, redemptions

BosValen Asset Management, the Hong Kong-based firm led by former SAC Capital Advisors manager Ken Xu, has seen assets in its hedge fund shrink by almost a third in five months because of investment losses and redemptions, according to a person familiar with the matter.

The equity long-short hedge fund shed about $120 million since early September, bringing assets to $250 million, said the person, who asked not to be identified as the information is private. The fund’s performance has been about flat since its inception in November 2014, according to the person, who didn’t provide details on returns since September.

Xu, who is BosValen’s chief investment officer, was not available to comment.

BosValen’s plight highlights the difficulties facing hedge funds in Asia, where swings can be extreme as capital from investors in the U.S. and Europe moves in and out of the region. The MSCI Asia-Pacific Index slumped 15 percent between the Bosvalen’s inception and the end of last year, as China’s economic slowdown and a global commodity slump battered the region’s markets.

The firm started trading with about $230 million, said the person. It was one of the highest-profile hedge fund startups in Asia in 2014, when the average new hedge fund in the region launched with just over $20 million, according to Singapore-based Eurekahedge Pte.

Asian Themes

The BosValen fund picks stocks with Asian investment themes, using fundamental research. Xu spent three years at billionaire Steven A. Cohen’s SAC, which has since been renamed Point72 Asset Management, as a Hong Kong-based manager of Asia long-short equity investments. He also worked for four years at Och-Ziff Capital Management Group, eventually co-heading Greater China equity long-short investments.

BosValen returned 1.2 percent in January, a month when market turmoil rocked many hedge funds, according to the person. It made money by investing in an information technology company and a consumer-staple firm, and on bets against some financial and consumer companies, the person said without giving details.

Xu said in September that he had gradually pared the fund’s gross exposure -- the combination of bullish and bearish bets on stocks -- and scaled back investments in Greater China, including American depository receipts and Hong Kong or China-listed shares. He made the changes as Chinese stocks slumped on concerns about growth and as domestic investors unwound leveraged positions.