Hedge funds focused on China witnessed a big drop in capital with total assets falling to $117.45 billion in the third quarter from $126.31 billion in the second quarter, according to Hedge Fund Research Inc. on Friday. Kenneth Heinz, president of HFR, cited concerns about slowing Chinese economic growth and questions over the reliability of corporate accounting practices in China for the decline in assets. However, he noted that there has been a recovery in risk tolerance in the fourth quarter as the Chinese stock market stabilized. Still, the ongoing investigation into security firms and asset managers in China is...