(Nov 5): Hong Kong-based fund manager Zeal Asset Management Ltd, whose clients have included the Norwegian sovereign wealth fund, will close after 15 years and seek to return at least US$1.6 billion (RM7 billion) to clients.
 
Zeal’s three founding partners are planning for retirement from the asset management business, which is “tentatively taking place before the end of 2025,” according to a statement on Tuesday. The founders include Jacky Choi, its chief investment officer, Daniel Poon, its deputy chief investment officer and Franco Ngan, its chief executive officer. 

Founded in 2009, the Hong Kong firm has gone through a changing asset management landscape as mounting geopolitical tensions, the pandemic and China’s economic slowdown brought widespread losses to China-focused funds since 2021. Global investors have favoured multi-strategy hedge funds in recent years and been reluctant to allocate to managers specialising in the world’s second-largest economy.

After what it called “a successful yet tumultuous journey”, Zeal became one of the few billion US dollar hedge funds in Asia within a few years of inception, serving global investors and building a retail presence in both Hong Kong and mainland China, according to the statement.

With annual gains of as much as 49% in its earlier years, the 14-year-old long-only Zeal Voyage China Fund suffered three consecutive years of double-digit losses starting 2021, according to a newsletter posted on its website. This year, it has returned about 10% as of Nov 4, half of the 20% gain of the MSCI China Index, according to data compiled by Bloomberg. That left the fund 45% off its net asset value at the end of 2020.

The unit trust oversaw nearly HK$1.3 billion (RM730.77 million) as of August, down from nearly US$183 million at the end of December, according to a US regulatory filing. 

The firm also oversees Zeal China Fund Ltd, a hedge fund whose assets stood at just under US$115 million after 14 years, as well as other smaller funds. The bulk of Zeal’s assets — US$916 million at the end of last year — sat in separate managed accounts for investors including unidentified sovereign wealth funds and public pensions, the filing showed. Norges Bank Investment Management said on its website that Zeal was one of the external managers it invested with at the end of 2023. 

Separate managed accounts give investors greater controls over their money, allowing them faster access to more information on the holdings, to terminate at their discretion the arrangement with the asset manager and negotiate better fee terms.

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