* Asia Pac hedge fund assets had dropped to $6 mln
* Firm also closing gold, natural resources hedge funds
* Says funds too small to grow back to critical mass
By Nishant Kumar
HONG KONG, Nov 16 Britain-based Wessex
Asset Management is closing three hedge funds, including one
that invests in Asia-Pacific, the money manager said in a letter
to investors, following a drop in assets under management and
double-digit losses in 2011.
The closure lengthens the list of hedge funds shutting down
this year as the market turmoil keeps investors on the
sidelines, making it tough for managers to raise assets.
Assets of the long/short equity hedge fund Wessex
Asia-Pacific Fund, which once managed more than $270 million,
had dropped to $11 million. The fund's net asset value had
slumped about 27 percent in 2011 to October, the letter showed.
Its gold hedge fund, which had started trading in 2007 with
more than $50 million of committed capital, was down 37 percent
this year and the asset had dropped to $3 million.
The natural resources fund, which managed peak assets of
more than $330 million in 2008, was down to $6 million and had
lost nearly 34 percent in the first 10 months of 2011.
"Our funds are now too small to have any realistic prospect
of growing back to critical mass, so the directors have no
option other than to close Wessex Asia-Pacific Fund, Wessex
Natural Resources Fund and Wessex Gold Fund," the hedge fund
said in a letter to investors on Tuesday.
Peter Chesterfield and Tim Weir founded Wessex in October
1999 after working together at British insurer Abbey Life.
"We still believe in value investing in Asia, in the
commodity super-cycle and the gold bull market, but value
investors need longer holding periods than are allowed to small
hedge funds in these markets," the firm said.
More than 80 hedge funds in Asia have closed down this year
as investors shy away from allocating fresh capital to the
region, according to data from industry tracker Eurekahedge.
Asia-focused hedge funds recorded a net outflow of $1.9
billion in September, their first monthly outflow in 17 months.
An e-mail to Director of Marketing Douglas Sloane was not