Hong Kong hedge fund SVI winds down bets on Chinese equities, returns capital to investors

Founded by Ken Xu as BosValen Asset Management in 2014 and rebranded as SVI six years later, the firm managed more than US$1 billion (HK$7.82 billion) in assets last year. It now plans to use its own capital and investment from new strategic partners to form a multifamily office, or an entity to manage the wealth of rich families.

The Value Multiplier Fund managed more than US$400 million at its peak and suffered a 1.1 per cent loss last year, according to a person familiar with its performance. The Eurekahedge Greater China Hedge Fund Index fell 8 per cent last year. The multiplier fund had an annualised return of 28 per cent since 2020, the person added.

The liquidation of the fund’s positions comes at a time when Chinese funds face mounting pressures on raising fresh capital and performance, owing to the country’s faltering economic growth, policy uncertainties and geopolitical tensions.

Some foreign investors are leaving China, while others are cautious about their exposure to the country.

China’s stock markets have struggled since 2021, with both the local benchmark CSI 300 Index and MSCI China Index falling between 2021 and 2023. China shares rebounded earlier this year, but have weakened again since June as investor confidence ebbed.

SVI’s family office will focus on global alternative investments, as well as opportunities in artificial intelligence and space technology, one of the sources said.