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Hong Kong-based Richland Capital is shutting down its hedge funds despite outperforming peers, an unexpected move for a successful operator in an Asian industry which is struggling to raise assets

Hong Kong-based Richland to shut hedge funds in surprise move

Mon, Apr 29 2013

By Nishant Kumar

HONG KONG (Reuters) – Hong Kong-based Richland Capital Management Ltd is shutting down its hedge funds despite outperforming peers, four sources said, an unexpected move for a successful operator in an Asian industry which is struggling to raise assets. Richland is one of Asia’s best-known hedge funds. It manages $100 million between two funds and advises on an additional $150 million for wealthy clients, according to a fund information document obtained by Reuters. The hedge fund, founded in 2006 by former HSBC Holdings Plc (HSBA.L: QuoteProfileResearchStock Buzz) trader Alex Au with Eva Lo, who earlier worked at Credit Suisse Group AG (CSGN.VX: QuoteProfile,ResearchStock Buzz), has made money for its main Richland Asia Absolute Return Fund each year since launch, including a 5.3 percent gain in 2008. An e-mail to Lo and Au remained unanswered. The sources, who have direct knowledge of the matter, declined to be named as they were not authorized to speak on the matter. It was not immediately clear why Richland was closing. Typically, hedge funds shut down in response to poor performance or clients withdrawing large amounts of money, but Richland has suffered from neither. “Today is the day when funds are winding down,” one of the sources said. Launched in December 2006 with $10 million, the Richland Asia Absolute Return Fund managed about $75 million in February this year, the fund document showed. The fund gained 14.1 percent in 2012 and was up about 6 percent in the first quarter of 2013, according to fund performance data seen by Reuters, outperforming a 10 percent gain in the benchmark Eurekahedge Asia index last year and 5.8 percent in the March quarter. The second fund, Richland Emerging Opportunities Fund, returned 13.1 percent last year and was up about 18 percent in the first quarter of 2013. So far, 23 hedge funds have shut down in Asia, compared with 18 launches, according to data from Eurekahedge. Last year, 169 hedge funds closed in Asia, exceeding 139 launches.

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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