Chinese hedge fund managers are scrambling to soothe investors after a rout in small-value stocks, even as regulators step up scrutiny of major market players' activities as they try to revive the country's ailing stock markets. Firms such as High-Flyer Quant Investment and Baiont Quant, which are hedge funds that deploy quantitative strategies using mathematical and statistical techniques, wrote to investors this week explaining their recent glaring underperformance and promising to beef up risk management, according to letters seen and verified by Reuters.