The sharp swings and significant volatility in the Chinese stock market this month have so far heavily cut into the performance of a handful of funds that specialize in that market, according to data published by investment bank HSBC, which tracks hedge fund performance.
Even so, most of the funds continue to enjoy strong gains for the year, through July 24. Many of these funds are relatively small, with just a few hundred million dollars under management.
For example, the Quam China Focus Segregated Portfolio is so far down more than 10 percent for the month. It is still up more than 34 percent for the year, however, making it one of the best performers. The fund is managed by Quam Asset Management, based in Hong Kong.
The fund looks for long-term absolute returns, combining “private equity style due diligence and hedge fund strategies,” seeking “down-side protection” and “alpha return” in the Greater China region, according to a document from the firm. The volatile fund lost 8.2 percent last year after posting a 62 percent gain in 2013. It reported having $118 million under management in the most recent HSBC report, way up from $76 million near the end of June.
The firm is headed by Chris Choy, who serves as chief investment officer. Choy has spent more than 25 years in hedge funds, funds of funds and private equity. He has an MBA from The University of East Asia, according to the firm’s website.
The largest fund in this group tracked by HSBC is the Golden China Fund, with about $2.1 billion under management. It is down 5.8 percent for the month through July 24, but is still up 20.40 percent for the year. The long-short fund invests in companies that generate a significant portion of revenues and profits from Mainland China, according to a firm document. It takes a value investing approach and seeks long-term above-average returns. The fund is headed by George Jiang, founder of Shanghai-based Greenwoods Asset Management, which operates the fund.
The fund is one of the best performers among all hedge funds in recent years. It gained 30 percent last year, 17.5 percent in 2013 and nearly 27 percent in 2012. Its only bad year was 2008, when it lost 55.55 percent.
The Zeal China Fund, managed by Hong Kong-based Zeal Asset Management, lost 7.7 percent this month already through July 24 and is now up a little more than 10 percent for the year. The firm says it takes a long-short approach, “adopting a disciplined value-style investment process that focuses on detailed original fundamental research and bottom-up stock-picking.”
The portfolio, which has $226 million under management, is managed by Daniel Poon, who has more than 28 years in the equity investment industry. He was previously a senior analyst at Buena Vista Fund Management from 2005 to 2009, responsible for researching listed companies, mainly in the Greater China region, and making investment decisions. He has also worked for ABN AMRO, Deutsche Bank, HG Asia and UBS. Poon holds an MBA from The Chinese University of Hong Kong and a B.Sc. degree in Economics & Statistics from the University of Hong Kong.
The Real Return Asian Fund is down 3 percent for the month so far, cutting its gain for the year to 8 percent. Managed by Ezra Sun, partner and head of Asia for London-based Veritas Asset Management, the long-short fund invests in stocks in the Asia Pacific region, including China, Japan, Australia, India, Hong Kong, Singapore, Malaysia, Thailand, Indonesia, Pakistan, Korea and Taiwan.
It first tries to identify broad macro themes to identify companies “which will be subject to positive or negative dynamics over the medium to long term,” according to the firm. It targets annualized returns of 10 percent to 15 percent, with low volatility.
Meanwhile, the Pinpoint China Fund is down 4.4 percent this month through July 17. This more than halved the performance of the fund, which is up 4.2 percent for the year now. It is managed by Pinpoint Asset Management in Hong Kong.
The long-short fund is headed by Qiang Wang, who has more than 20 years of investment management experiences, according to the firm’s website. He graduated from the Shanghai University in China with a degree in engineering in 1989 and previously worked at China Aerospace Investment Trust, Guo-Tai Jun-An Securities and Jilin Securities, responsible for proprietary trading, asset management and investment consulting.
