* Former top 10 hedge fund manager slips down rankings
* Flagship fund faces second year of losses
* Chief Investment Officer scraps career break - source
By Tommy Wilkes
LONDON, Dec 21 The slowdown in emerging markets
is hitting hedge fund Sloane Robinson hard, highlighting how,
even as the industry attracts investors, managers can quickly
fall from grace if they fail to perform.
The London-based stock-picker - one of the capital's oldest
managers and once among its 10 biggest - has seen assets under
management slide to around $2.5 billion, down more than
four-fifths from a 2008 high of $15.1 billion.
Assets in the firm's flagship emerging markets fund - run by
chief investment officer Richard Chenevix-Trench - have fallen
to around $700 million, down from $1.8 billion at the end of
2011, and investors are bracing for a second consecutive year of
"...Emerging market investment, as in so much of the world,
has become about a search for niches of growth, where businesses
can find room to develop irrespective of the slowing economies
and still meet or exceed the expectations currently baked into
prices," he wrote in a client letter obtained by Reuters.
The fund is down 1.7 percent to Nov. 30, the letter shows.
Last year it lost 17.2 percent. In 2010 made just 2.7 percent.
The fund has its biggest exposure to South Korea, Singapore,
India and Hong Kong/China, where shares hit their lowest level
in four years last month.
Chenevix-Trench also said in the letter he hiked a position
in Samsung Electronics to 5 percent, believing
markets will reassess its valuation relative to Apple.
He had indicated he would step down from his role for a six
month break from March 2013 but a source familiar with the firm
said the manager had now shelved the plan.
Dozens of hedge funds are struggling to adapt to the share
price volatility brought by an economic slowdown in key markets
like China, India and Brazil. The MSCI Emerging Markets Index
is only 5 percent ahead of its 2010 level - in
contrast with the 450 percent rally in the 2003-2007 period.
Greg Coffey, one of London's best-known traders, made his
name and fortune between 2004 and 2007 trading emerging markets,
but subsequently struggled with losses and in October said he
was retiring, aged 41, from Moore Capital.
This year the average fund has made less than half the MSCI
index's 14 percent rise, Hedge Fund Research shows.
Sloane Robinson told investors in September that
Chenevix-Trench's fund would be transformed into a more
diversified global mandate while his Asia fund, which suffered
big 2011 losses, would be shut, a second source close to the
The manager will launch a new emerging markets equities
strategy to replace the re-mandated fund, the source added.
Hugh Sloane and George Robinson, both prominent donors to
Britain's ruling Conservative Party, founded their hedge fund in
1993, years before Europe's now-dominant managers started out in
the late 1990s and early 2000s.
The firm ran $15.1 billion in assets in 2008, making it the
sixth biggest European hedge fund, according to Hedge Fund
Journal's EUROPE50. This year, at end-June, it ranked 32nd with
$3 billion in assets and that has since fallen to $2.5 billion.
Some of the firm's other funds have also fared badly. The
International Portfolio is down 6.2 percent to Nov. 30 - the
third year of losses in a row. The smaller Frontier and Japan
funds have made double-digit gains this year but are still to
make their clients money since they launched.
Sloane Robinson declined a request for comment.