Hong Kong’s best-performing hedge funds are small and discreet
2024 was a great year for hedge funds. LCH Investments, the London-based clearing house owned by LSEG, reported last week that the 20 largest funds alone earned investors a record $94bn dollars across the year. It was a more mixed bag in Asia – but there were more than a few which stood out from the crowd.
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Bloomberg’s list of top Asian hedge funds by 2024 returns was unsurprisingly dominated by funds in one city – Hong Kong. The city’s combination of Chinese mainland access and tradition of international finance makes it a natural hub for the continent’s most successful hedge funds. By strategy, this is what they are.
The top two multistrategy funds in Asia were managed by the same firm: MY.Alpha, with its Japan fund returning 22% across the year, and its Asian Opportunities fund returning 34%. The firm seems to run a pretty tight ship: the Hong Kong Securities and Futures Commission (SFC) shows that it added no new regulated staff in a year and a half, when it brought in Yida Li from fellow HK hedge fund Jetha Global, and Jon Jhun from Wellington Management.
The top two macro funds were also managed by the same firm: Ocean Arete. Its macro fund returned 19% over 2024, while its Newbury Fund returned 28%. It’s also run as a tight ship: the SFC shows that it didn’t bring in any new regulated staff in 2024 or 2023. Its founder, Will Li, was a Deutsche Bank Equity Capital Markets MD and serial hedge fund founder, having also launched the now-defunct Ocean Capital Management in 2009.
But the biggest returns of 2024 were rather unsurprisingly in long-short equity, and the best returns of them all were from RAYS Capital Partners’ Asian technology fund, which returned a whopping 80% over the course of the year.
RAYS Capital Partners manages the fund. Its most recent addition was Sek Chuen (Marshall) Li, who joined the firm as a portfolio manager in April 2024 from Pinpoint Asset Management, another HK hedge fund, whose long-short team he was part of. Unfortunately, Li did not last long at RAYS and left the firm at the start of this month. It’s not clear where he’s going next.
Why did equities funds do so well? China. The (US) fed rate cut in September invited a slew of market-easing measures (as well as stimulus) from the Chinese government that pumped life into the country’s faltering equities and property markets. Bloomberg reported that Asian hedge funds’ returns were ahead of international peers for the first nine months of the year for the first time in three years.
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