Brummer Closes Asia Equity Fund After 15% Loss

Feb 25 2011 | 10:52am ET

Brummer & Partners has pulled the plug on its Asia stock fund and its management team after a disastrous 2010.

Brummer's Karakoram fund, run from Singapore by Ee Toh Chia, lost 15.4% last year, the worst performance of any of the Scandinavian hedge fund giant's hedge funds, Bloomberg News reports. The brutal performance by Karakoram, which managed 5.4% of Brummer's Multi-Strategy fund's assets, contributed to the larger fund's underperformance: The Brummer flagship rose just 3.5% last year, well behind the average hedge fund's 10% increase.

Brummer launched Karakoram in July 2009. The fund was managing US$234 million at the time of its demise.

The decision to shutter Karakoram came after Brummer boosted its scrutiny of the unit's "risk and result components" over the summer. It determined that the "probability of positive returns was so low that it was in the unit-holders' interest to fully redeem the investment."

Which is not to say that Karakoram was the only Brummer hedge fund to do badly last year. It's Arbor Market Neutral Fund also suffered a big loss, dropping 9.7%.

Brummer is not giving up on Asia entirely: The firm in December launched a new Asian event-driven shop, Orvent Asset Management, led by former Millennium Management portfolio manager Scott Collison.


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