Asia-focused funds add USD20bn in assets in 2013… CSV China Opps fund outperforms all relevant benchmarks…
Asia-focused hedge funds added USD20 billion in assets in 2013, American funds dominate global AUM, according to a survey from tracker AsiaHedge.
The industry still remains about USD33 billion below its peak asset level hit in 2007, but the twice-a-year survey shows that investors are starting to return, reports Reuters.
"This dispels the notion that Asian hedge funds have fallen off the radar for global allocators," said Aradhna Dayal, head of Asia for HedgeFund Intelligence, which runs AsiaHedge.
"We have seen assets in some of the large, home-grown managers swell considerably last year," she added.
A 13.6 per cent median return in Asian hedge funds, strong gains by China and Japan-focused managers, and a USD3.85 billion capital flow into new launches last year helped the turnaround.
In another sign of a maturing industry, the survey found that nearly 80 per cent of the assets invested in Asia hedge funds were now being run from within the region, up from just 52 per cent in 2000 and 71 per cent in 2009. Assets at distressed and special situation hedge funds doubled to USD6.3 billion in 2013, while Japan-focused funds recorded a 35 per cent increase in assets to USD19 billion. Assets at China and Greater China equity long/short funds rose to USD20.8 billion, making it the largest fund category in Asia.
Hedge funds operating out of North America (US or Canada) control 73 cents of every dollar in assets under management (AUM); this is also the only region to comprise a smaller per centage of active funds relative to its active fund AUM (62 per cent versus 73 per cent). Specifically, the US is an AUM bastion, representing 70 per cent of the total, or more than four times that of the next highest nation (the UK).
North America has the widest dispersion of AUM while those with operations domiciled in Africa and the Middle East had the least. By this we mean North America has not only the largest funds in the industry, but also maintains a healthy group of emerging managers.
South Africa is home to the majority of funds operating in Africa and the Middle East; Hong Kong for Asia-based firms; UK for Europe – followed by Switzerland; while New York and Brazil are the top spots for hedge funds in North America and Latin America.
Long-only equity strategies tend to have the industry’s greatest longevity. Measuring launches by year since 2006 shows the universe consistently has the highest per centage of each annual vintage remaining active today.
While two and 20 remains the most common single fee structure, the combination of alternative fee structures or those with lower management fees and 20 per cent incentive fees account for the majority of the industry’s active offerings.
The CSV China Opportunities Fund, L.P. a long/short equity fund solely focused on China, has just completed its fourth year with a return of 14.7 per cent in 2013 (after returning 1.7 per cent in December), annualizing 13 per cent and gaining a cumulative return of 64 per cent since its January 2010 inception, thus outperforming all relevant benchmarks, according to Opalesque.
Comparatively, the Hang Seng China Enterprises returned -5.4 per cent in 2013 and a cumulative -15 per cent over the last four years; the MSCI China was up 0.4 per cent last year and down 2.5 per cent in the last four years; and the Eurekahedge China Long/Short Equity Index was up 17.7 per cent in 2013 and up 22 per cent for the last four years.
The hedge fund, which is managed by Shanghai-based CSV Capital Partners, has USD51.6m in assets under management and is domiciled in Delaware. Mr. Earl Yen is the founder and managing director of the firm.
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