Heavy losses have prompted Dantai Capital to shut down its flagship hedge fund, the Greater China-focused Dantai Master Fund, after the firm concluded the investment strategy no longer works in the current market environment, according to a report by Bloomberg.

Heavy losses have prompted Dantai Capital to shut down its flagship hedge fund, the Greater China-focused Dantai Master Fund, after the firm concluded the investment strategy no longer works in the current market environment, according to a report by Bloomberg.

The report cites unnamed sources familiar with the matter as confirming the Hong Kong-based firm's decision, with an investor update revealing that the fund racked up losses of 26% in the first five months on the back of an almost 46% loss in 2022.

At its peak in 2021, the Dantai Master Fund has assets of around $2.4 billion, although its current size is unknown. The fund's closure comes amid a wider downturn for China-focused equity funds with the Eurekahedge index of Greater China-focused stock pickers having declined 14% in 2022 and fallen by another 2.9% in the first half of this year.