Dantai Capital Ltd. is shutting down its Greater China-focused flagship hedge fund after heavy losses, said people familiar with the matter.
(Bloomberg) — Dantai Capital Ltd. is shutting down its Greater China-focused flagship hedge fund after heavy losses, said people familiar with the matter.
The Hong Kong-based firm decided to shutter it after concluding its investment strategy no longer works in the current market environment, said the people, who asked not to be identified as the information is private. Dantai Master Fund lost about 26% this year through May, according to an update sent to investors. That followed a nearly 46% plunge last year.
Dantai’s founder Jason Xiang didn’t reply to an email seeking comment.
China-focused equity hedge funds face unprecedented uncertainty. Domestic regulatory shifts since 2021 dented confidence, while geopolitical tensions are showing no signs of letting up. A Eurekahedge index of Greater China-focused stock pickers declined 14% in 2022 and another 2.9% in the first half of this year. The gauge had never had two consecutive years of losses since the Singapore-based company started to collect data in 2000.
Tiger Management LLC-backed Yulan Capital Management shut an Asia hedge fund focused on Greater China in late 2022, after more than eight years.
The Dantai fund’s peaked at around $2.4 billion in 2021. Its current size is unknown.
It logged double-digit gains in each of its first five years after trading began in 2017. Following a 27% loss in the first quarter last year, Dantai halved the management fee charged on its assets.
“We are obviously disappointed with the performance since 2021,” said Sebastien Sirois, whose Blue Lotus Fund has been an investor with Dantai for years. “However, Jason Xiang, the investment manager, has been generous and honest with his approach” with investors, Sirois said.
After the flagship fund’s closure, the firm will continue to manage the Dantai Alpha Fund, a market-neutral vehicle that started in February, and the Dantai Partnership Fund.
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