Wessex closing Asia hedge fund on asset slump
UK-based Wessex Asset Management is closing a hedge fund that invests in Asia-Pacific.
This is due to a drop in assets under management and double-digit losses in 2011.
Assets of the long/short equity hedge fund Wessex Asia-Pacific Fund, which once managed more than $270 million, had dropped to $11 million. The fund's net asset value had slumped about 27 percent in 2011 to October, the letter showed.
"Our funds are now too small to have any realistic prospect of growing back to critical mass, so the directors have no option other than to close Wessex Asia-Pacific Fund, Wessex Natural Resources Fund and Wessex Gold Fund," the hedge fund said in a letter to investors on Tuesday.
"We still believe in value investing in Asia, in the commodity super-cycle and the gold bull market, but value investors need longer holding periods than are allowed to small hedge funds in these markets," the firm said.
More than 80 hedge funds in Asia have closed down this year as investors shy away from allocating fresh capital to the region, according to data from industry tracker Eurekahedge.
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