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Asia-focused hedge funds weather August storm better than peers

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According to data from Credit Suisse Group AG’s prime brokerage unit, approximately 80 Asia-focused hedge funds reported average losses of -2 per cent and

According to data from Credit Suisse Group AG’s prime brokerage unit, approximately 80 Asia-focused hedge funds reported average losses of -2 per cent and median losses of -1.5 per cent in August reported Bloomberg this week. By comparison, Hedge Fund Research’s HFRX Global Hedge Fund Index fell -3.47 per cent. This is a promising volte-face on 2008 when Asian funds slumped some -21 per cent compared to the industry average -11 per cent according to Eurekahedge. Volatility funds such as those run by Stephen Diggle’s Vulpes Investment Management in Singapore and New York-based Titan Capital Group LLC both gained around 4 per cent in August.

Investors usually expect Asia hedge funds to lose money in a down market according to Ben Happ (pictured), APAC regional head of capital services for Credit Suisse in Hong Kong, who was quoted as saying: “The August performance is evidence of the change that Asian hedge fund managers have made with respect to risk management.” Happ’s boss, Matt Pecot, Credit Suisse’s head of APAC prime services, backed up this sentiment by saying: “This resilient performance is a strong affirmation of the increasing sophistication of Asian managers, and a positive signal for greater capital flows into hedge funds active in the region.” Figures reported by Hedge Fund Research confirm that USD2.6billion of new capital flowed into Asia-focused hedge funds in 2Q11, inflating total AUM in the region to USD90billion. If they can continue to avoid the strife being felt in Europe and the US, Asian hedgies could well see strong allocations during Q3.

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