Riley Paterson Investment Management is getting out of the hedge fund business, despite an enviable track record of returns.
The Singapore-based firm will close its only hedge fund after assets plummeted by more than 90% over the past 27 months, Bloomberg News reports. Investors, apparently unimpressed by the Asian Opportunities Fund's 21% return in 2008, have cut the fund's assets under management from US$335 million at the beginning of 2010 to just US$47.9 million now.
"Assets under management looked as though they were going to $30 million by June this year as we fell below institutional size," co-founder Daren Riley told Bloomberg News. "We feel it's better to return the money to investors than being forced to cut resources employed below the high standard all our investors deserve."
Investors aren't stick with Riley Paterson—or jumping on board—in spite of the fact that the firm has suffered only one down year, 2010, when it fell 7%. It rose 8% last year.
Riley had closed the fund to new investors in January 2010 after its assets rose above US$300 million.
Riley said he and his partners may give the strategy another go.
"Asian equities are below levels we started the fund at almost five years ago," he told Bloomberg. "We believe the strategy we have been running, perhaps with greater ability to hedge external global risks, is one we continue to believe in and, with stronger long-term commitments from institutions, could be launched in the future."