The HFRX China Index posted a record performance gain of 50.4 per cent in 2009, as emerging Asian financial markets led the global equity market recovery from losses experienced during the financial crisis of 2008, according to data from Hedge Fund Research.
Investors allocated new capital cautiously despite strong gains for the year, with total capital in Asian hedge fund industry increasing to USD76.3bn, the highest level since the third quarter of 2008.
Despite inflows in 2H09, investors withdrew nearly USD11bn from Asian hedge funds in 2009, but these withdrawals were offset by a performance-based increase in assets under management of USD15.7bn.
Equity hedge strategies generated USD10.6bn in performance-based gains in 2009, which more than offset the USD5.3bn that investors withdrew from Asian equity hedge funds.
Asia-focused hedge funds now represent more than 15.1 per cent of all funds, although Asian hedge funds are characteristically smaller and more tactically nimble, with assets invested in these funds representing 4.8 per cent of global industry capital.
Nearly 24 per cent of all Asian focused hedge funds are now located in China, which represents approximately 2.65 per cent of all hedge funds worldwide.
Morgan Stanley and Goldman Sachs are prime brokers for nearly half of all Asian-focused hedge funds, while the market share of both UBS and Deutsche Bank has grown in the last year.
HSBC, Citco and Bank of Bermuda remained the top three fund administrators, collectively representing nearly half of all funds.
“Global investors are continuing to allocate to the Asian hedge fund industry as a way of accessing strong secular growth and diversification of investment strategies,” says Ken Heinz, president of Hedge Fund Research. “Recent developments in China, including the government’s approval of stock index futures in the Chinese capital market, will allow investors more flexibility in accessing this growth and are likely to contribute to significant growth in the Asian hedge fund industry in coming years.”
