Asian Hedge Fund Aspex Loses 16% in October's Tech Rout

One of Asia's largest hedge funds, Aspex Management, posted a loss of about 16% in October when a selloff in AI-linked stocks rattled global markets, a person with knowledge of the matter said.

It marked one of the biggest monthly drawdowns for the $14 billion Hong Kong-based fund, according to the source.

But the fund, focused on pan-Asian equities, is still up 9% this year through October, the source said.

Aspex Management, founded by former Och-Ziff Capital Management Asia equities head Hermes Li, did not immediately respond to a Reuters request for comment.

Asia's markets hit hardest

During October, investors dumped AI-related stocks from chipmakers to hyperscalers amid growing skepticism about whether they will gain sufficient returns from massive investments in the sector.

The Nasdaq Composite dropped 5%, while in Asia, the tech-heavy Korean KOSPI index and Taiwanese benchmarks lost 16% and 6% respectively. The Star 50 index, a gauge of China's high-tech firms, slumped 24%.

The selloff has gained momentum this month after big wins for the Democrats in the US midterm elections fuelled fears of more regulatory scrutiny for the industry.

Asia was the worst-performing region last month among the equity long-short hedge funds tracked by Goldman Sachs. Asian stock pickers fell 8.3% on average, compared to a 2.5% decline globally.

A backer of AI listings

Aspex has been an active cornerstone investor in Hong Kong listings this year, and was among the backers of AI startup MiniMax and optical transceiver company Zhongji Innolight.

The October loss is the latest sign of how the AI trade's reversal is hitting funds across Asia, after a brutal global equity selloff wiped out year-to-date gains at many hedge funds this week.

Sources

• Reuters — Asian hedge fund Aspex suffers 16% loss in October tech rout, source says
• Innopark IT — Tech selloff wipes out hedge fund gains, forcing risk cuts and layoffs