Asia’s Hedge Funds Just Had Their Worst Year Since 2008

As investor updates for the final month of 2018 trickle in, there’s one overriding message: December capped a year most hedge-fund managers in Asia — and their clients — would rather forget.

From ill-timed bets on Chinese tech stocks to simultaneous collapses across asset classes that typically don’t move in tandem, firms that have rarely had a losing year turned in dismal report cards.

Asia-focused hedge funds declined an average 1.8 percent last month, Eurekahedge data show, extending 2018’s slide to 8.7 percent, the worst performance since 2008 and a result that made other regions’ declines look tame. Markets were rattled by weakening corporate earnings, the pace of U.S. rate hikes, slower global growth and rising trade tensions. Less than one-third of firms made money.

Hardest Hit

Hedge funds in Asia trailed their global peers in 2018

One of the biggest losers was Quantedge Capital Pte, whose global fund plunged 29 percent in 2018, including a 6.3 percent loss in December. That’s a particularly bad result considering the fund up until last year had generated an average annualized return of 20 percent since its inception in October 2006.

“In the last 30 years, there have only been two years where all four asset classes were down simultaneously,” once in 2015 and again in 2018, Quantedge’s client update said. “Portfolio losses were inevitable as diversification and dynamic allocation among these asset classes are of limited value under such circumstances.”

Unlike 2015, several of Quantedge’s usually uncorrelated strategies underperformed in unison. Value stocks trailed growth stocks, thwarting the firm’s equity market-neutral investments, while a multitude of natural disasters led to losses in insurance-linked securities.

A representative for Quantedge declined to comment.

Roughing It

December wrapped up a tumultuous year for hedge funds in Asia

Quantedge did have company, however. Here are some of the other Asian funds that lost money in 2018, according to people with direct knowledge of their operations. Representatives for the funds either declined to comment or didn’t immediately respond to requests for comment.

  • Trades gone sour for Graticule’s Asia Macro Fund in December included those linked to U.S. interest rates, U.S. and Japanese stocks, the Australian dollar and the yuan.
  • Greenwoods Asset Management Co.’s $1.8 billion Golden China Fund had its second-worst annual loss in the fund’s almost 15-year history. The 23 percent decline is also much worse than peers — a Eurekahedge index tracking China-focused stock hedge funds slid 15 percent in 2018.
  • Orchid China Master Fund’s healthcare-stock holdings were hit in December on concerns of lower generic drug prices. Chinese internet stocks traded in the U.S. were also dented as the NASDAQ Composite Index slid 9.5 percent, its worst monthly performance since November 2008.
  • A rebound of 9 percent in December wasn’t enough for PruLev Global Macro Fund. Investments in fixed income paid off, but not sufficiently to recover from a 16 percent plunge in October.

Extraordinary’ Month Heaps Further Pain on Hedge Funds


Some Asian hedge funds managed to beat the odd

Amid the carnage there were some bright spots. Representatives for the funds below either declined to comment or didn’t immediately respond to requests for comment. Information is according to people with direct knowledge of the funds’ operations.

  • Snow Lake Capital Ltd.’s Asia fund returned 13 percent in December, extending gains since it began trading in April to 34 percent. Its $1.3 billion China Master Fund capped a nine-year winning streak. Bullish and bearish bets on telecoms, media and tech shares, as well as financial stocks, were the main profitable trades in December for group’s $70 million Snow Lake Asia Master Fund.
  • The $266 million True Partner Fund was helped by a 21 percent gain during February’s stock rout.
  • Counterpoint Asian Macro Fund, meanwhile, gained from a call option on Hong Kong-listed Chinese companies early in December before cutting bullish bets on Asian stocks and adding bearish wagers on U.S. equities.

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Swiss-Asia Cap Intro Interview Series #7 – AlgoTrend

 Swiss-Asia Cap Intro Interview Series – AlgoTrend

September 21, 2016


Written by Swiss-Asia


Launched in October 2015, AlgoTrend is an open-end fund that generates high returns in Asian listed securities with algorithm trading. Julien Moisson and Julien Guerrand tells us more.


  1. Why did you start AlgoTrend?

We had previously founded our own market making hedge fund, and found that the hedge fund world suits us better than banking. We are entrepreneurs, and Swiss-Asia’s platform allows us to focus better on the trading.


  1. What is the investment strategy?

We are an intraday only, fully automated strategy on Asian listed futures. We capture intraday market movements with in-depth, momentum indicators from the volatility curve. With over 15 years’ experience in options market making, we predict these movements by looking at the implied volatility’s curve.


  1. How do you keep the momentum going in today’s volatile market?

Our strategies are intraday and only correlated to volatility. This lets us perform better under volatile market conditions. When we started, we were only trading KOSPI Futures. Now, we have expanded to include HSI, HSCEI and Nikkei. We plan to add more markets, as diversification allows us to capture more market movements on a daily basis.


  1. What is your trading philosophy?

We trade with a scientific, mathematical approach by looking at extremely liquid markets with a complete option structure. With intraday, we always trade the ratio return / max drawdown. Even under low volatility market conditions, we are able to capture small market movements, which differentiates us from a long volatility fund.


  1. For aspiring entrepreneurs, what should they do when they start their own fund?

Think well about the cost structure. For small hedge funds, it is important to start at a relatively low cost. Swiss-Asia makes this possible.


  1. If you were not a fund manager, what would you be?

A professional poker player. I believe hedge fund traders and poker players have to be rational, consistent and keep human emotion to a minimum.

For more information on the featured funds, please visit Registration closes on 1 October 2016.


25th August 2016

Written by Steve Knabl
3.5 minutes

A few times a year, I conduct a lecture on Hedge Funds and its operations in one of the universities in Singapore. At the end of my lecture, I get all sorts of great questions. But one that is always there, and that I always seem to not answer precisely is this – how do we enter the world of hedge funds?

The hedge fund industry is a relatively closed one. Only a select few succeed and manage to build a real long term career out of it. But a well-managed start may help you get in for success. Here are SIX basic pointers to put all the chances on your side.

1. Learn the jargon! Read as much as you can about how hedge funds operate and where your professional aspirations may fit in. Read the top books on the subject. Read online media reports and relevant, up to date articles. Get to know the names of the large hedge funds in your region. Learn the jargon. Basically, you should try to make this your daily interest.

2. Where do I fit in? Find an entry point for your level of knowledge, experience and aspirations. Most of all, be realistic. You will need to learn a lot on the job. Gaining employment is a competitive process in this industry. You will typically need to show commitment and loyalty to get in. Do not expect to job hop to get higher up the ranks. Job hoppers are seen as a deterrent in our industry, a dangerous breed that can potentially disclose trade secrets. We like committed, hardworking people who grow and gain experience in the same firm.

3. Make that internship count! Complete one or more internships in the industry. It does not matter where you are located in the firm, many hedge fund managers are looking for help in operations, middle office, trading, investor relations and research. Be ready to work for free though. The main point of an internship is to get in, work and learn. Make it count. Make that internship as long as you can. Six to 12 months is ideal. With some luck, you may be offered a permanent spot.

4. What is your edge? Develop a unique value proposition to potential employers. Reflect on your recent knowledge, natural abilities, past work experience, internships and education. Decide how you could effectively package them when you apply for jobs. Be relevant. Do not be generic. You need to come up with specific skills and abilities that allow you to stand out from the rest. Hedge fund managers are a smart bunch. Do not oversell yourself as they will smell you out in the first five minutes of the interview.

5. Your network is your net worth! Networking is the fine art of building alliances, connecting people and mentoring others. It needs to be part of your daily life, not just in business. Our Business Development Manager, Omar Taheri, wrote a great piece on networking. It reflects the breadth of daily encounters and how they can affect your business life: To immerse yourself in the “Hedgies” world, networking is clearly the best way to meet industry professionals. Fundies by Swiss-Asia (, Hedge Funds Club ( and Springboard Talent Management ( are a few good events to attend. So get out there and meet your peers. Who knows, you might even meet a mentor at one of these events.

6. Stay relevant with education. As markets evolve, you need to keep up with the changing times. Getting relevant industry knowledge through education is a great way to do so. These days, skills that stand out in the hedge fund industry include public relations, networking, data analysis, coding, risk management and of course, portfolio construction. There are a number of hedge fund programmes available in the market, but not many offer direct access to industry experts. Choose wisely and you could get your foot into the right door.

I hope these tips help advance your hedge fund career.

To do our part as a Hedge Fund incubation platform, we had the great opportunity to team up with Inflection Point Intelligence. Previously known as the Henley Business School’s Executive Hedge Fund Programme, this six-month learning journey offers a very down to earth and applicable curriculum. All tutors are renowned industry professionals and practitioners who have come together to generously share their experiences.

More about the Inflection Point Executive Hedge Fund Programme. Due to popular demand in Hong Kong, the programme debuts in Singapore this October 2016. Held over six months, it is a monthly weekend educational course for 25 participants. Delivered by over 30 leading industry professionals at the new Reuters offices every Saturday, the programme offers participants a holistic, real-practice overview of hedge funds. Evening networking events are also organized for peers and executives to forge links with participants and practitioners.

“Nowhere in Asia offers anything close to this program. Our tutors offer invaluable real-world insights, and cutting edge industry practices.
Participants will also have the added bonus of unparalleled networking opportunities with our mentors, industry partners and alumni.”  

Steve Bernstein, MD at Hudson Advisors Japan.

To ensure a personalised experience and top notch education standards, admission is limited to the 25 qualified applicants per intake. Please visit the Henley website for further information and online registration:

Contact us now before the programme gets over-subscribed.


Steve Knabl

COO & Managing Partner

Swiss-Asia Financial Services Pte Ltd



Written by Steve Knabl

10 traits that make a Great External Wealth Manager

Finding a good External Wealth Manager is crucial for clients who are savvier now than in past years. Looking to grow their portfolio of assets, clients today have high expectations. They want their wealth manager’s skill sets to be exceptional, as well as their trustworthiness to be beyond reproach.

Here are 10 traits essential to making a great External Wealth Manager (“EAM”).

  1. Experience is key. An exceptional EAM has 15 or more years’ experience in private banking. They have knowledge and a skill set that can only be learned through hands-on work in the field.
  1. Entrepreneurial at heart, the EAM’s mindset of thinking out of the box is a huge asset that provides exceptional value for the client. Staying humble, they should also be filled with self-confidence about what they bring to the table.
  1. Strong core clients that have stuck by their side for a decade or longer is a positive sign. These long-term relationships are an indicator of excellence. They have been through the ups and downs of the markets with their EAM and are more than willing to stay with them.
  1. An effective communicator, the external wealth manager focuses on his client’s needs, making them the center of his attention to the exclusion of everything else. This trait is most important as he is someone who listens and anticipates.
  1. Tried and tested processes are key to evaluating a client’s entire financial picture. The best EAM’s are not driven solely by profits, they have proven portfolio management methodologies to meet the goals set by the client.
  1. Performance is key. An EAM must has strong investment capabilities that consistently meet and exceed expectations.
  1. Objective and independent, EAM’s must have a clear mind that is uncluttered by bias will very certainly perform best. They make the best decisions for their clients.
  1. Integrity is essential for building the bonds of trust that are necessary for a productive relationship with the client.
  1. Open to change, a successful EAM with years of experience did not achieve success through rigid, unbending techniques. Accomplishments were made due to an open mind that stays abreast of the latest investment products, strategies and methods. The financial markets are not static; they are continually changing and a top-notch EAM changes with them.
  1. IT savvy, a great EAM understands the latest technology. Using it for the benefit of clients is important for long-term success. Sticking to outdated methods and technology is a form of negligence that leaves the client at a disadvantage.

In a nutshell, an EAM should be an excellent communicator who is client focused, forward thinking and results driven. Strong ethics, honesty and trustworthiness go hand-in-hand with techniques and investment strategies that are key to building long-lasting relationships.

Volatile markets and sophisticated financial products also require External Wealth Managers to have extensive knowledge and the ability to navigate fiscal waters that can be treacherous. They must be able to focus on the big picture without neglecting the minute details important for consistent success.

At Swiss-Asia we take care of all the peripheral headaches of managing the business so that the EAM’s can focus on the 10 traits that allow them to service their clients with the highest degree of professionalism.  Strive for Excellence.

For further information on Swiss-Asia’s services please visit our website: