HONG KONG, July 28 Reuters China39;s crisishit property sector has driven underperformance this year in some Asiafocused credit funds, including one led by a former Lehman Brothers portfolio manager, pummelling their returns and bringing years of gains to a juddering halt.

Hong Kongbased LR Capital39;s Asia Credit Alpha Fund, a hedge fund with more than half of its geographical exposure focused on China, slumped by 18.9 in 2022 as of endMay, according to documents seen by Reuters and a person familiar with the matter.

The fund, led by former Lehman Brothers portfolio manager Li Ran, retreated another 4 in June. The downbeat performance looks set to end the fund39;s fouryear winning streak since inception, showed the documents.

Its losses were partly a result of its exposure to Chinese property developers as sectorwide pain engulfed even companies with stronger credit profiles, according to the person.

The fund39;s exposure to the overall property industry shrank to 22 by the end of May from 33 at the beginning of this year, the documents show.

LR39;s performance rout shows how even seasoned investment managers are struggling to navigate China39;s devastating property sector crisis.

China39;s property sector, a key pillar of the world39;s secondlargest economy, has lurched from one crisis to another and has been a major drag on economic growth over the past year. It has seen a string of defaults by debtsqueezed developers.

Prudence Investment Management, a Hong…