Asian hedge fund assets grow 3.9 per cent, capital inflows slow to return
A new report by AsiaHedge has found that Asian hedge fund assets grew by a modest 3.9 per cent during the first half of 2010 to USD137.8 billion. They stood at USD132.5 billion at the end of last year. The figures show that the region is struggling to attract significant inflows, as investors remain cautious over the global economic recovery. Moreover, Asian hedge funds have been one of the worst performers, regionally speaking, this year (-0.17 per cent YTD). Nevertheless, one factor that has helped the region has been investors’ growing confidence in China as it looks to increase flexibility in its currency policy. According to US-based Hedge Fund Research, 2Q10 saw USD360 million in new capital returning to Asia.
This 3.9 per cent climb mirrors the 3 per cent global increase in assets as revealed by HFR recently; although quarter-on-quarter global assets were actually down from USD1.67 billion to USD1.65 billion. A survey conducted by Deutsche Bank AG back in March suggested that assets would increase to USD1.72 trillion this year, but this now looks unlikely. With capital arteries in APAC evidently clogged, Aradhna Dayal (pictured), editor of AsiaHedge, commented in the press that investors are probably waiting for the right climate to restart allocation. “It will be a slow crawl back up for Asian managers, combined with at least one more major round of consolidation,” Dayal told Bloomberg.
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