SINGAPORE- Asia Genesis Asset Management, based in Singapore, decided to liquidate its hedge fund after facing significant withdrawals. This decision was taken after the Asia Genesis Macro Fund recorded a loss of 18.8% in the first weeks of January 2024. Chua Soon Hock, Chief Investment Officer, revealed that he closed the fund to prevent further losses. The fund, which was launched in 2020, is managed by Chua and has a value of about US$300 million.
The closure comes amid market uncertainty, with Chinese stocks experiencing massive declines and Japanese stocks registering a rally. Chua revealed that the big mistake was their strategy of increasing long positions in China and Hong Kong and short positions in Japan. Their prediction that China would outperform Japan failed to materialize, and difficulties were compounded by the lack of economic stimulus from China, including interest rate cuts.
Chua expressed disappointment that China’s economic policies did not do enough to fight deflation, leading to a loss of market confidence and a prolonged bear market. Despite this, the Asia Genesis Macro Fund recorded positive performance in 2020, 2021, and 2022, and generated a 6.5% return in 2023 until November.
Chua, who previously managed a Japanese macro fund with positive results, predicted that 2024 would be the start of a bull market for Chinese stocks
Chua, who previously managed a Japanese macro fund with positive results, predicted that 2024 would be the start of a bull market for Chinese stocks. However, China’s stock market started 2024 poorly, with the CSI 300 Index falling to five-year lows and Hong Kong’s Hang Seng Index dropping more than 10%. These declines reflected economic uncertainty in China, which was exacerbated by falling property sales and uneven economic growth.
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The decision to close the fund marks a disappointing end for investors hoping for a Chinese market recovery. It reflects the enormous challenges faced by hedge funds in the face of continuing global uncertainty.
