By Summer Zhen
HONG KONG (Reuters) -Hong Kong-based hedge fund firm Zeal Asset Management said on Tuesday it will cease operating next year and return over $1.6 billion in investor capital as its founders plan to retire.
“After a successful yet tumultuous journey since 2009, the founding partners of the firm have decided to start planning for retirement from the asset management business, tentatively taking place before the end of 2025,” the firm, which primarily invests in Chinese equities, said on its website.
The first step is “to return all clients’ capital and exit the asset management industry”, the firm said.
Offshore China-focused hedge funds, usually based in Hong Kong and Singapore, have been struggling in terms of performance and fundraising since 2021 due to the long-term downturn in the country’s stock markets and foreign investors’ capital flight amid geopolitical tension.
Zeal’s flagship retail fund, Voyage China Fund, was up 49% in 2020, but lost 15.8%, 22% and 23.6% in 2021, 2022 and 2023 respectively.
The $1.3 billion fund had gained 1% this year as of the end of August, its latest monthly report showed on Zeal’s website. The fund stopped taking new subscription from Nov. 5.
Its smaller hedge fund – Zeal China is down 1.7% this year through Sept. 27, said a person familiar with the performance.
In comparison, the Eurekahedge Greater China Long Short Equities Hedge Fund Index was up about 9% for the first nine months of the year.
A Zeal spokesperson told Reuters that the firm continues to operate with healthy financials and its Zeal China Fund has achieved a higher risk-adjusted return than the broad market since its launch in January 2010.
Zeal was founded by Chief Investment Officer Jacky Choi, former senior fund manager of Hong Kong’s Value Partners, deputy CIO Daniel Poon, who previously worked at Deutsche Bank and UBS, and Chief Executive Officer Franco Ngan, former CEO at Value Partners.
(Reporting by Summer Zhen; Editing by Christopher Cushing and Emelia Sithole-Matarise)
