Blue Rice winds down amid "structural limitations"

Blue Rice Investment Management (Brim) is closing its two credit-focused funds and will return capital to investors by the year-end after navigating volatile and uncertain markets this year, says founder Guan Ong.

The Singapore-based firm has been running its flagship Asian Credit Fund since 2009 and launched the Brim Asian Short Duration Fund in June this year, with total AUM across both strategies less than $100 million.

The Asian Credit Fund, which runs most of Brim’s capital, “has structural limitations” that makes it difficult to navigate through market uncertainty, Ong tells AsianInvestor. He cites challenges due to volatile and unpredictable market conditions this year, which he expects to continue into 2014.

The US Federal Reserve’s wavering position on when it will taper its quantitative easing programme – which has triggered global market volatility – has been especially vexing. “We’ve spent too much time on Fed watch,” Ong says.

The Asian Credit fund is understood to have had flat performance year-to-date, after returning 8.5% in 2012.

Investors will exit the fund with a gain, which he feels was the preferable alternative to continuing to operate the fund through volatile market conditions. “I wanted to do right by folks,” says Ong.

The Brim Asian Short Duration Fund – a short-term bond strategy that targets returns of 300 basis points above cash deposits held in the bank – gained 1.14% from its June launch to the end of October, according to documents seen by AsianInvestor.  

Guan declined to comment on whether he would continue to run the Short Duration Fund under a managed account structure or fund platform, saying he has no firm plans at the moment as to his next move.

Ong founded Brim in 2009 after three years as chief investment officer at Korean Investment Corporation as the sovereign wealth fund’s first non-Korean CIO. He had previously been president and chief executive at Prudential Asset Management in Seoul.