Dynasty Asset Management, the first hedge fund to take root in Mainland China and one of the most aggressive, is closing for business as its assets dwindled and its founding partners battle over firm matters. According to The Wall Street Journal, Dynasty didn’t lose on investments but lost investors after producing underwhelming returns in the past couple of years. The idea was for founder Steve Dai to focus on his stock-picking talent and founder Ed Mullen to call on his marketing acumen to build up the firm – which it did from about US$20 million assets under management in 2003 to US$400 million at its peak. Faced with increasingly common problem, too much money for too few good investments, its funds saw pitiful performance in 2004 and were not much better last year. As the firm winds down, Dai and Mullen, who reportedly poured a nice chunk of their personal money into the firm, were battling over Dynasty, and in the end, when they couldn’t settle on how much the former should pay the latter in a buyout, they decided to shut down completely. It is expected they both will emerge in their own new firms.
