Such a blowup is a relatively rare occurrence in the tiny world of Asian hedge funds. Only about 360 of the estimated 8,600 hedge funds worldwide are based in Asia, and the region saw only 86 new funds launched in 2003, according to Eureka Hedge, a financial publisher.
The CSA Absolute Return Fund was launched in Hong Kong in 1997 and invests in about 10 individual U.S. hedge funds. Charles Schmitt & Associates also runs a fund of hedge funds listed on the Dublin Stock Exchange and a similar fund of funds domiciled in the British Virgin Islands. The $22.7 million Dublin fund opened to investors in February. The BVI fund had about $58.7 million under management, according to the firm's Web site.
Carver told investors that there are no apparent problems with the other funds.
"There is nothing I can possibly say to express how sorry we are," she wrote.George Van, founder of Van Hedge Fund Advisors International of Nashville, Tenn., said his firm established a marketing and development agreement last March with Charles Schmitt & Associates for the British Virgin Islands fund. Van said he was surprised to receive Carver's letter. "The bad news is that there appears to be something going on with that fund," he said. "The good news is that we've been told the others are all right, and that we don't have anything to do with