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 the CSA Absolute Return fund." According to the firm's Web site, the fund is up 2.78% in 2004, and had a 14.45% return last year. It has had positive returns since its inception in 1997, with the best results coming in 1999, when it returned 23.7%. Its worst year was 2002, when it returned an even 9%. A 0.51% loss for March and a 0.16% loss in April were the only two consecutive losing months in the history of the fund. A biography on the Web site claims Schmitt was once a senior business manager for the New York Stock Exchange, and helped manage the NYSE Pension Fund. He also managed funds for Citibank, Chase Manhattan Bank, Lehman Brothers and the John Hancock Life Insurance Co. An NYSE spokesman initially professed no knowledge of Schmitt's employment at the exchange, but later said Schmitt worked there from August 1977 to October 1980. CSA Absolute Return requires a minimum investment of $250,000 for its A-class shares, and $100,000 for its B-class shares. Although most individual U.S. investors are barred from investing directly in offshore hedge funds, the Charles Schmitt funds could have American money through family offshore trusts, or investments from tax-free institutions, such as charitable foundations or educational endowments. Many U.S. colleges and universities invest in hedge funds.