Hong Kong hedge fund Pivotal Investments is closing its doors, the latest Asian hedge fund to join the scrapheap this year.
Pivotal's demise was blamed on a common complaint, inability to raise money. The firm debuted in 2010 with US$50 million but was never able to exceed US$70 million in assets, despite returning 44.5% last year. The fund, a volatility, event-driven and fundamental analysis vehicle investing in Greater China, Japan and the U.S., fell 2% in its first year.
Pivotal is in the process of returning capital to investors, Investment & Pensions Asia reports.
The firm was founded by Brian Yeh and Michael Sun of Evolution Capital Management. Yeh has agreed to join Farallon Capital Management spin-off China Rock Capital and Sun plans to manage his own money. The future of Pivotal's other employees, including Macy Chu, chief operating officer, and Jonathan Leong, vice president, is unclear.
More than 140 Asia hedge funds closed last year. This year, in addition to Pivotal, the casualty list includes Boyer Allan Investment Management, Novaterra Capital, Orvent Asset Management, Penta Investment Advisors, Riley Paterson Investment Management, Sequence Asset Management and Tiger Asia Management. All told, about 100 Asian hedge funds are expected to close this year.