End of the Road for New Silk Road: Challenges for Singapore’s Hedge Funds
In early July, investment firm New Silk Road announced its closure after a 16-year tenure in Asia.
Headquartered in Singapore, New Silk Road was one of the city-state’s most enduring hedge funds. It managed the Asia Landmark Fund, offering investment opportunities to U.S. and international investors via Cayman Islands-based onshore and offshore structures.
Why New Silk Road Is Closing—and Who Founded It
Founded in 2009 by Raymond Goh, former head of Asian equities at GIC, and Hoong Yik Luen, former head of Hong Kong-China equity products at Deutsche Bank, New Silk Road was a trailblazer in Singapore’s financial sector.
At its inception, Singapore’s hedge fund market managed S$59 billion. By December 2024, this figure had surged to S$327 billion, according to the Monetary Authority of Singapore (MAS).
The firm was among the first in Singapore to focus on long-short equity investments across Asia and was notable for its early exposure to China through a local team in Shanghai.
In 2012, New Silk Road secured Qualified Foreign Institutional Investor (QFII) status, allowing it to invest directly in yuan-denominated Chinese stocks and bonds. Fewer than 200 firms held this license at the time, enhancing its appeal to U.S. institutional investors eager for Asia-focused exposure.
At its peak in 2021, New Silk Road had almost US$2 billion in assets under management.
Goh and Hoong were early pioneers in Asia-focused hedge funds. Goh spent 18 years at GIC, while Hoong, a National University of Singapore engineering graduate, had held various equity investment roles before co-founding New Silk Road.
Both men are now over 60, according to Bloomberg.
China’s Market Downturn
The founders cited a desire to slow down as a key reason for the closure. However, the fund was also hit hard by China’s market slump, triggered by sweeping regulatory crackdowns in sectors like tech and real estate, which drove investors toward U.S. markets.
In 2022, China’s CSI 300 Index dropped 22%, with the downturn continuing into 2023. Both the Asia Landmark Fund and the China Fund posted negative returns for three of the past five years—losing 28% and 19% respectively in 2022, according to Bloomberg.
These losses led to staff cuts in Shanghai and the shutdown of a new Southeast Asia fund. The number of affected employees was not disclosed.
The firm officially announced its closure on July 22. All remaining capital will be returned to investors as the funds are wound down amid high redemptions and underperformance.
Experts told The Business Times that once redemptions reach a critical level, it becomes nearly impossible for hedge funds to rebuild capital.
Not an Isolated Case
New Silk Road isn’t alone. Other funds have also faced turbulence. In January 2024, Singapore’s Asia Genesis suffered major losses from its long positions in Hong Kong and China and short bets against Japan, where markets soared to a 34-year high.
Its Asia Genesis Macro fund lost 18.8% in just a few weeks. The fund closed all positions by January 18 and returned investors’ money.
Singapore’s Hedge Fund Landscape
Despite recent closures, Singapore remains an attractive hub for hedge fund managers in Asia-Pacific. As of end-2023, more than 250 global hedge fund managers had a presence in the country, according to MAS.
Leading Singapore hedge funds include Quantedge Capital and Dymon Asia Capital. Dymon manages over US$3.5 billion, with an 8% return through May this year and 17% gains in 2024. Quantedge oversees more than US$4 billion.
Another veteran player is APS Capital Management, founded by GIC and MAS alumnus Wong Kok Hoi.
Hedge funds are privately managed and typically require significant capital. They pursue a variety of strategies—ranging from long-short equity to global macro and multi-strategy—and invest in diverse asset classes like equities, bonds, real estate, currencies, and futures.
As of December, Singapore’s hedge fund market stood at S$327 billion, according to MAS.
