Hong Kong Hedge Fund Collapse: Investors Await Regulatory Investigation Results

Strategic Insights -

Investors in two collapsed Hong-Kong-based hedge funds, Global Diversified Trading (GDT) and Global Opportunities Trading (GOT), are anxiously waiting for the outcome of a regulatory investigation into the funds' collapse more than a year ago. The liquidator, Deloitte & Touche, is expected to release its report by the end of the month, which may shed light on whether the funds' managers and marketing firm Towry Law International, a subsidiary of Australia's AMP, were at fault. The Securities & Futures Commission (SFC) has been investigating the collapse, which resulted in estimated losses of over $50 million.

Key Takeaways:

  • The two hedge funds, GDT and GOT, combined held assets worth $50 million before their collapse, with GOT having $36 million and GDT having $14 million under management.
  • Deloitte's interim report on GDT suggested the case may involve fraudulent manipulation of asset prices.
  • Anthony Wong, a director of Asia Financial Assets Management, was involved in managing the funds and was previously censured by the SFC in April 2002 for arranging a concert party to manipulate a listed company, Tack Hsin.
  • Tong M Lee, a representative of the affected investors, stated that many investors lost their entire savings and some even took out loans to invest in the funds.
  • The SFC has been investigating whether Towry Law International, the marketing firm responsible for promoting the funds in Asia and the Middle East, was at fault.
  • The regulatory investigation has been ongoing for over a year, with investors eagerly awaiting the outcome.

Statistics:

  • Estimated losses from the collapse of the two hedge funds: $50 million
  • Assets under management for GOT: $36 million
  • Assets under management for GDT: $14 million
  • Total assets under management for both hedge funds: $50 million
  • Number of affected investors: numerous

Sources:

  • Deloitte & Touche (liquidator of the two hedge funds)
  • Securities & Futures Commission (SFC) of Hong Kong
  • Asia Financial Assets Management
  • Anthony Wong, director of Asia Financial Assets Management
  • Tong M Lee, representative of the affected investors
  • Towry Law International (marketed the two hedge funds in Asia and the Middle East, a subsidiary of Australia's AMP)