(CNN) -- The Man Asian Literary Prize announced Thursday it was seeking a new sponsor, after losing the support of the Man Group -- the same company that funds the prestigious Man Booker Prizes.
"We recently announced a program to reduce costs by $100 million by the end of next year, and this decision should be seen in that context," said David Waller, head of communications for the London-based asset management company, in an email to the prize's administrators. "We will do all we can to ensure a smooth transition to a new sponsor," he added.
Founded in 2007, the annual Man Asian Literary Prize awards $30,000 to what it deems the best novel by an Asian writer published in the same calendar year, either written or translated into English. Translators, if involved, are awarded $5,000.
Man will no longer fund the prize after the 2012 winner is announced next March, the company said.
The loss of its sponsor has given prize administrators "a great chance to think about how we're going to move forward with the prize," said Harrison Kelly, the prize's publicity manager in Hong Kong, adding that the literary landscape in Asia had significantly changed since the prize was established.
"Back then, there wasn't anyone doing what we're doing," said Kelly. "Now in 2012, the Man Asian Literary prize is the leading prize of Asian literature. No one is doing what we're doing, all the way from Iran to Japan."
One author whose manuscript was shortlisted for the prize during its inaugural year in 2007 said she was disappointed its sponsors had pulled out.
"Of course I was shocked, upset, disappointed to hear about (the sponsorship withdrawal)," said Xu Xi, now writer-in-residence at the City University of Hong Kong.
"When the first prize happened, it was such a hopeful and wonderful thing for writers in Asia because it was a prize for manuscripts," she said. (The prize was originally intended for unpublished manuscripts, but changed its focus to published novels in 2010.)
"It doesn't matter how big or small the prize is; it just reinforces that hell, this is worth (the labor of writing)," Xu said.
She said the shortlisting of her manuscript also helped her gain tremendous media attention, although she did not credit it for her success in gaining a publisher for her manuscript since she was already a published author.
Xu said she was still waiting to secure a contract with a large publisher and the accolade had helped enhance her resume.
"It's something that my agent can now say to larger publishers and it gets me more attention in editorial rooms. It's very competitive in fiction."
"There is no other prize in Asia that has any kind of international clout, that helps to bring to the fore writing specifically that is Asia-focused," she said.
"Writing that is published or translated into English is very important for the world of literature, especially the writing out of Asia when so much of what's happening in the world today is emerging from Asia."
In light of the loss of funding, Xu suggested that the prize could be handled in a "smarter way-- one that is really more important for literature than for public relations."
As a short-listed candidate, she recalled being flown from New York to Hong Kong for the prize ceremony held over a "fancy dinner," an expense she said was unnecessary.
In Asia, literary prizes have much fewer resources compared to the United States, where there are many literary publishers and an established infrastructure to administer literary prizes, she said.
Kelly said the prize's administrators were in discussions with a few potential sponsors and hoped that others would approach them as well.