A "significant and unprecedented drawdown" following failed bets in China and Japan has prompted Singapore-based Asia Genesis Asset Management to liquidate its macro hedge fund, according to a report by Reuters.
The report cites Chief Investment Officer Chua Soon Hock in an investor letter seen by Reuters, which reveals that the firm's Asia Genesis Macro Fund lost 18.8% in the first weeks of January, and that the decision to close the fund and return investor funds had been taken to prevent further losses.
The closure of the fund, which was launched by Chua in 2020 and manages around $300m, comes amid an unprecedented stock rout in China and a sustained stock market rally in Japan.
The fund reportedly increased its long positions in Hong Kong and China while shorting Japan, in the belief that China would outperform Japan this year, prompting Chua to admit in the letter that: "We made big mistakes in the recent sharp Nikkei and Hong Kong moves which went in opposite directions. I have reached the stage whereby my confidence as a trader is lost."
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