Fri, Nov 27, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Investors looking for alpha in Asia-focused hedge funds must focus on small funds

Thursday, December 01, 2011

Peter Douglas
From Komfie Manalo, Opalesque Asia:

In Asian hedge funds universe, size does matter – or the "lack" of it. According to Singapore-based hedge fund data provider GFIA pte ltd the smaller the size of a hedge fund in Asia, the better it is for investors.

In its latest client monthly newsletter, GFIA, which is also a specialist in skill-based managers in Asian and emerging markets, said that the sweet spot for performance in Asia-focused hedge funds has decreased to 2004 levels.

"Investors seeking performance must focus on smaller funds," GFIA’s multi-year study of the relationship between a hedge fund’s size and its performance found.

Peter Douglas CAIA, principal of GFIA, commented: "We’ve always felt that alpha is a function of small asset size. But the economics of a hedge fund business are such that the industry would dearly love us to believe that alpha is scaleable. Yet again our research has demonstrated that, although the optimum size of a hedge fund in Asia is fluid over time, it’s never large, and, right now, it’s particularly small."

Douglas said the study offers a comprehensive analysis of the effect of size on performance and volatility across the four largest strategy groups. It found that the current sweet spot is surprisingly small for Asia-focused hedge funds. Asian funds with assets between $30m and $75m are likely to produce the best risk adjusted and absolute r......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Hedge fund marketing and the selling cycle[more]

    By Bruce Frumerman. How long is the selling cycle now? That’s a question my financial communications and sales marketing consulting firm has been asked on a regular basis by hedge fund firm owners and sales people, ever since we opened the doors to our firm in 1987 pre-crash. Wa

  2. People - Solus Alternative Asset Management adds chief strategist from BTIG[more]

    From Daniel Greenhaus joined hedge fund manager Solus Alternative Asset Management as managing director and chief strategist. He will work closely with Chris Bondy, Solus’ chief economist, managing director and executive vice president, said Chris Pucillo, CEO and chief investmen

  3. Opalesque Roundtable: Seeding deal terms can be onerous for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Executives from fund of funds firms, family offices, a placement agent, a private equity firm, and an accounting firm gathered in Connecticut last month for the

  4. Opalesque Roundtable: Family offices flock to co-investment[more]

    Bailey McCann, Opalesque New York: Co-investments have been a hot topic for pension funds in recent years, as they try to move away from high fees and improve transparency. But now, family offices are more readily getting into the mix and establishing in-house deal teams, according to the delega

  5. More institutional investors invest in CTAs compared to last year despite dissatisfaction with performance[more]

    Benedicte Gravrand, Opalesque Geneva: "Despite a strong start to 2015 for CTAs in Q1, commodity market conditions have made return generation difficult for fund managers over much of the rest of the year to date," says Preqin’s November