This week, Reuters reported that Asian-based hedgies are starting to tactically redeploy staff to the US and Europe as they bid to compete with their Western peers for a slice of the asset pie. After all, the majority of assets that flow into Asian hedge funds come from western investors. David Gray, Asia Pacific Head of Prime Services for UBS, told Hedgeweek: “We’ve seen a lot of dollar inflows coming out of the US and investing in non US-based funds, which has been good for Asian fund managers.” This view was echoed by Mark Wightman, head of asset management strategy for Asia Pacific, SunGard, who told Reuters that “virtually all that money (being raised by Asian managers) comes from Europe and America”.

Singapore-based Tantallon Capital has been quick to redeploy staff, having opened a New York office last December, whilst Central Asset Investments has started to market its fund in the US to expand its client base. Such trends, though, are hardly new. “In the past various funds have started up London, New York operations in response to how effectively they can market to their US and European client base. It’s not unusual,” said Gray.

That Asian funds are thinking more aggressively is a good sign. It shows confidence in their track records and a willingness to grab assets rather than waiting for them to trickle into the region. After all, competition from major global funds setting up shop in Asia (Soros Fund Management, GLG Partners, Viking Global Investors) is getting harder. “Those hedge funds in Asia with an asset-gathering agenda are having to work harder, putting more effort into reaching out to major investors in the US and London,” said Singapore-based GFIA principal Peter Douglas. But even though some managers are heading West to chase dollars, Douglas believes there are signs of growth, albeit from a low base, in Asia: “Some global managers have put marketing people on the ground in Asia in order to court these early-stage investors.”

This movement of regional and global funds as they chase assets just exemplifies the interconnected nature of the markets. “The globalisation of fund flows means that regional boundaries fade away,” said Gray. “As the industry becomes more institutional, hedge funds are going to become more consistent with respect to their risk management, compliance offering and overall operations.”