From WKZO: 2024-04-08 04:12:43

Billionaire Zhang Lei’s Hillhouse Investment saw a 33% drop in hedge fund assets last year to $27.5 billion. Chinese tech, consumer goods, and healthcare sectors struggle due to regulatory crackdowns. China stocks have fallen for three years, leading to major U.S. funds reducing exposure. HHLR faces capital outflows and underperformance concerns.

Numerous U.S.-based investors have withdrawn capital from Hillhouse’s HHLR hedge fund arm due to underperformance. A source notes a shift in capital to customised portfolios. HHLR’s assets fell by an estimated $10 billion in 2023, the largest decline among billion-dollar hedge funds globally.

Chinese cancer treatment specialist BeiGene Ltd, a top HHLR holding, has seen over 60% drop in shares. A unit of HHLR was probed by China’s regulator last year. Fundraising pressures and market uncertainties have led many China-focused hedge funds, including HHLR, to downsize or shift focus to non-China equities amid net outflows in Asian hedge funds.

Amid the decline in China-focused hedge funds, a 5% loss on average was reported last year. Hedge fund performance has improved this year after Chinese government efforts to stabilise the stock market. A rebound in the Chinese economy in 2023 could restore confidence, says hedge fund research head Amy Castle.



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