Komfie Manalo, Opalesque Asia: Asian hedge funds focused on China reported sharp gains in October with the HFRI China Index up 5.2% (+5.25% YTD), as investor risk tolerance and market liquidity returned to Asian financial markets.
According to US data provider Hedge Fund Research, October’s gain is the strongest monthly performance reported by China-focused hedge funds since their 14% average return in April this year. The funds had lost -15.4% on average in Q3.
The total hedge fund capital invested in Asian-focused funds fell to $117.5bn (¥ Japanese Yen 14432.5bn, RMB 748.3bn) in 3Q, a decline of $8.7bn from 2Q, the largest quarterly asset drop since 4Q08. Investor withdrawals in 3Q totaled just under $1bn, while performance based losses approached $8bn. Globally, total hedge fund capital fell by $95bn in the quarter to $2.87tln.
"Chinese hedge funds experienced extreme dislocations in the third quarter, as investor risk tolerance fell sharply as a result of slowing Chinese economic growth, as well as fundamental structural concerns relating to the reliability of accounting practices employed by Chinese companies," stated Kenneth J. Heinz, President of HFR.
Heinz added, "Many of these concerns moderated in October as investor risk tolerance returned, resulting in strong gains for Chinese hedge funds as they recovered from 3Q losses. While Asian-focused hedge funds offer tremen...................... To view our full article Click here
|