Tiger Asia Management returned a "disappointing" 0.5% last year, while the average hedge fund rose about 10%, the firm told clients in its year-end letter.
Bill Hwang, founder of New York-based Tiger Asia, said he was "disappointed with 2010 performance."
"Although many of our positions last year were profitable, and our short positions generally underperformed their markets, shorts were a major drag on returns," he said in the Feb. 1 letter, obtained by Bloomberg News. More than 90% of the firm's shorts are in China.
Hwang said Tiger Asia has "meaningfully added" to those shorts in recent months, while also going long on consumer durables and automotives in the country. In Japan, Hwang said he would "focus on opportunities in media, mobile telecom and social networking stocks."
Tiger Asia's assets fell by about one-third last year to $2 billion, amidst an investigation in both the U.S. and Hong Kong. Hwang wrote that the firm is cooperating with the insider-trading probes and is "unable to predict when the investigations will be concluded or what regulatory or other outcomes might result."