One yr in the past, a hedge fund supervisor launched the saddest letter

One yr in the past at this time, Asia Genesis Asset Administration introduced it was shutting down. The choice got here after a ‘disastrous’ January of buying and selling that adopted a number of powerful months and destroyed the arrogance of CIO Chua Quickly Hock.

Each dealer has gone via struggles and the sensation of shedding his edge. It is a uncooked instance of the ache of getting it mistaken for a sustained stretch. Notably, Chinese language property and the response of policymakers have continued to confound market members.

Pricey Investor,

I’m writing to you with a heavy coronary heart and utmost remorse. Asia Genesis Macro Fund has had a big and unprecedented drawdown of -18.eight% within the first weeks of January. As such, I’m making the painful determination to shut the fund and return your investments. This determination has been significantly thought via and thought of with my colleagues and is the logical prudent means ahead earlier than incurring additional losses. An in depth clarification of the drawdown, actions taken to handle the Fund’s threat, and include losses for traders could be discovered on the subsequent web page.

I’ve reached the stage whereby my confidence as a dealer is misplaced. The current powerful buying and selling—October, November, December 2023 adopted by a disastrous January 2024—has confirmed that my previous expertise is not legitimate and as an alternative, is working in opposition to me. I’ve misplaced my data, buying and selling, and psychological edge. The precept of risk-reward for each the short-term and long-term has turned its head. We made huge errors within the current sharp Nikkei and Hong Kong strikes which went in reverse instructions. I underestimated the Nikkei’s straight-line upward motion and Nikkei ETFs being purchased at a 20% premium over web worth on China exchanges, and the way lengthy this can proceed.

I nonetheless don’t perceive the inconsistency of China policymakers not preventing in opposition to deflation, resulting in the continued lack of market confidence and extended bear market. We made one other huge mistake in making an attempt to select the underside within the Grasp Seng and Grasp Seng Tech indices. I’m astounded by the unbelievable Nikkei-Grasp Seng unfold that priced Chinese language versus Japanese shares on the identical worth as in 1991, regardless of present financial realities.

Within the days and weeks forward, we are going to observe up with every considered one of you relating to redemptions from the Fund. Our fund administrator CITCO will calculate the Fund’s Web Asset Values and my workforce will work carefully with them to course of the return of your funding on the earliest potential time. In the meantime, we stay at your disposal to reply any queries or present additional element.

My honest deep apologies to all of you who’ve trusted me together with your cash.

With utmost apology, thanks, and deepest appreciation,Chua Quickly HockCIO

Notably, this blowup marked the underside for the Grasp Seng Index and it has rallied 32% from there. As any dealer is aware of, this solely makes the ache worse for Chua Quickly Hock. His LinkedIn profile at present reveals him as ‘retired’ however he is nonetheless lively on the platform and is bullish on the $45 trillion in Chinese language financial savings shifting into fairness markets.

“Be affected person Spring is coming to China inventory markets,” he

This text was written by Adam Button at www.ubaidahsan.com.



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