Singapore’s New Silk Road hedge fund shuts down amidst investor retreat

The fund’s assets fell to $615m by the end of 2024.

New Silk Road Investment Pte, one of Singapore’s longest-running hedge funds, is shutting down after a steep drop in performance and an exodus of U.S. investors slashed its assets under management, Bloomberg reported.

The fund’s assets fell from nearly $2b in 2021 to $615m by the end of 2024. Co-founder Yik Luen Hoong confirmed in an email to Bloomberg that all capital will be returned to investors and the firm’s funds will be closed.

“Our traditional source of funding from the US institutions had over the last several years been less enthusiastic about liquid equity investments in Asia, in no small part due to geopolitical reasons,” he said.

Founded in 2009 by Hoong, a former Deutsche Bank executive, and Raymond Goh, previously head of Asian equities at GIC, New Silk Road was an early player in Singapore’s hedge fund industry and among the first foreign investors in China’s onshore markets.

But its performance lagged in recent years. Both its Asia Landmark Fund and China Fund posted losses in three of the past five years. In 2022 alone, they fell 28% and 19% respectively, tracking the 22% drop in China’s CSI 300 Index.

U.S. institutional investors, once a core funding base, began pulling out amidst worsening sentiment toward Asia, the report said. Hoong said the firm struggled to gain traction with a long-term value investing strategy that had fallen out of favor.

Earlier this year, the fund closed its Southeast Asia strategy and cut staff in Shanghai. It is unclear how many jobs will be lost in the full wind-down.

Hoong stressed that the firm wasn’t forced to close due to financial pressure. Instead, both founders, now in their 60s, chose to exit the business. “We had just decided to hang up our boots to return the capital to our investors so that they can pursue a more appropriate strategy of the time,” he said.