This year has already proved bountiful for Asian hedge funds.
This year has already proved bountiful for Asian hedge funds. According to Hedge Fund Research, they attracted USD3.6billion in new assets for Q1 2011 and a new report by Singapore research house Eurekahedge Pte sees no sign of that abating. They estimate that Asian hedge fund assets – which currently stand at around USD134billion – could exceed USD180billion within the next 12 to 18 months, the region shining ever more brightly in investors’ eyes as the US and Eurozone debt crisis rumbles along. In its report, Eurekahedge points out that the number of Asian funds has grown eightfold to 1,235 since the start of the century thanks to less restrictive regulations in the region, not to mention the phenomenal economic expansion which has thrown up myriad alpha-generating opportunities over recent years.
Referring to the Asian hedge fund industry as one of the “most exciting and fast-moving sectors” of the global hedge fund industry, Eurekahedge wrote in its report: “The region continues to develop at a fast pace with new funds starting up and employing an increasing number of different strategies and geographical mandates.” The last point is important: Asia has long been considered overly concentrated in equity l/s managers, lacking the diversification of strategies in London and New York. They still dominate the region, accounting for 44 per cent of all hedge funds, closely followed by multi-strategy making up 15 per cent. Nevertheless, event-driven, credit and macro strategies are beginning to grow in number: the latter two running USD5.13billion and USD6.01billion in AUM respectively according to Asiahedge’s recent survey.