Hong Kong-based hedge fund Zeal Asset Management, which focuses mainly on Chinese equities, is to cease operations next year, and return over $1.6bn in capital to investors as its founders prepare for retirement, according to a report by Reuters.
The report quotes a statement on the company’s website as saying: “After a successful yet tumultuous journey since 2009, the founding partners have decided to start planning for retirement from the asset management business, aiming to conclude by late 2025.”
The firm’s first priority will be to “return all clients’ capital and exit the asset management industry,” Zeal stated.
Offshore China-focused hedge funds, typically located in Hong Kong and Singapore, have faced challenges in recent years, with performance and fundraising impacted by a prolonged downturn in China’s stock markets and capital outflows amid rising geopolitical tensions. Zeal’s flagship Voyage China Fund surged by 49% in 2020 but has since faced losses, declining by 15.8% in 2021, 22% in 2022, and 23.5% in 2023.
The $1.3 billion Voyage China Fund posted a modest gain of 1% this year through August, according to Zeal’s latest monthly report. As of 5 November, the fund stopped accepting new subscriptions.
Zeal’s smaller China fund reported a 1.7% decline for the year through 27 September, according to an unnamed source familiar with its performance.
In contrast, the Eurekahedge Greater China Long Short Equities Hedge Fund Index posted a 9% gain in the first nine months of 2023.
