**Title:** New Silk Road Investment Pte Shuts Down Amid Weak Returns
**Meta Description:** New Silk Road Investment Pte, a long-standing hedge fund in Singapore, is closing due to poor performance and reduced US investor interest in Asia.
**URL Slug:** new-silk-road-investment-shutdown
**Headline:** New Silk Road Investment Pte Closes Its Doors After Years of Declining Returns
New Silk Road Investment Pte, one of Singapore’s oldest hedge funds, is set to close its operations following a significant decline in returns and a retreat of US investors from the Asian market. Founded approximately 16 years ago by finance veterans Yik Luen Hoong and Raymond Goh, the firm has seen its assets under management drop dramatically from nearly $2 billion in 2021 to just $615 million by December 2023.
The decision to shut down comes at a time when smaller hedge funds are grappling with challenging market conditions, including volatility and geopolitical tensions. These factors have contributed to a shift in investor sentiment, particularly among US institutions, which have become increasingly cautious about liquid equity investments in Asia. Hoong noted that this trend is largely influenced by geopolitical concerns.
In an email, Hoong confirmed that all remaining capital would be returned to investors as the firm winds down its operations. New Silk Road was a trailblazer in Singapore’s financial landscape when it was established in 2009, with Hoong previously leading Hong Kong-China equity products at Deutsche Bank and Goh having served as the head of Asian equities at GIC Pte. At its inception, the hedge fund industry in Singapore managed only S$59 billion, a stark contrast to the S$327 billion reported as of December 2023.
The firm was among the first foreign investors in China, establishing a presence in Shanghai and gaining approval in 2012 to invest in yuan-denominated mainland Chinese stocks and bonds under the Qualified Foreign Institutional Investor program. At that time, fewer than 200 firms had received such licenses from the China Securities Regulatory Commission.
However, in recent years, the fund’s performance has faltered, with three of the last five years yielding negative returns for both the Asia Landmark Fund and the China Fund. In 2022 alone, these funds experienced declines of 28% and 19%, respectively, coinciding with a 22% drop in China’s benchmark CSI 300 Index. This downturn has persisted into 2023, impacting many seasoned investors in China and prompting some to exit the market.
New Silk Road had previously enjoyed popularity among US institutional investors, but as these investors grew wary of the Asian market, many began redeeming their funds. Hoong remarked that the current market environment has not favored active value funds like theirs, which rely on a longer-term investment approach.
Earlier this year, the firm attempted to adapt by reducing its workforce in Shanghai and closing a recently launched Southeast Asia fund. While the exact number of affected employees remains unclear, Hoong emphasized that the decision to close was not driven by financial deficits but rather by the challenging landscape for active management in Asia.
In conclusion, the closure of New Silk Road Investment Pte highlights the difficulties faced by hedge funds in the current economic climate, particularly those with a focus on Asian markets. As the investment landscape continues to evolve, the implications for similar firms will be significant.
**FAQ:**
**What led to the closure of New Silk Road Investment Pte?**
The closure was primarily due to weak returns and a decline in interest from US investors in Asian markets, compounded by challenging market conditions and geopolitical tensions.