Sun, Sep 21, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Asian investors still ‘not embracing’ hedge funds

Monday, August 22, 2011
Opalesque Industry Update - Reports are conflicting on Asia’s role in the development of the hedge fund industry as a whole. While there were studies, particularly from Singapore-based research firm GFIA claiming that Asia is now emerging as a hedge fund center (See Opalesque Exclusive: here), other studies are pointing out that Asia is actually lagging compared to its Western counterpart.

A report by The Financial Times said that while European investors are gradually allocating again to hedge funds, Asian investors have not caught up with the trend.

The report interviewed Robert Marquardt, chairman of the $1.5bn Signet hedge fund, who said that Asian investors lack “a strong understanding of the hedge fund industry” which is an Anglo-Saxon invention. Marquardt added that Asia is still not familiar with the global perspective offered by hedge funds.

“Hedge funds appear to be off their radar screens because they have found it easy to generate returns in the white-hot investment grade and high-yield bond markets,” he added.

Anurag Mahesh, Singapore-based head of Asia-Pacific investments at Deutsche Bank’s Private Wealth Management division pointed out many Asian businessmen are skeptical about the opportunities offered by hedge funds, primarily because of the difficulties in shorting Chinese stock and the limited liquidity in exchange traded funds.

With the exception of Hong Kong and Singapore, Mahesh said that Asia is trailing Western economies in accepting hedge funds. The situation is not helped during the financial crisis in 2008 when many investors from Asia were hit by lock up or limited redemptions from hedge funds..

Two of the major advantages of Asian cities are low rental and operational costs compared to London and New York. And despite rental costs in key Asian cities increasing in recent years, they are still relatively low compared to their Western counterparts.

Asia also enjoys more liberal regimes in terms of regulations unlike London and the U.S. which are adding more pressures to hedge fund managers and the industry.

Another report added that investors have picked up their optimism for Asian-focused hedge funds. Early this month, industry data provider Hedge Fund Research revealed that Asia-focused hedge funds attracted $2.6bn in 2Q as assets reach $90bn. It added that Asian hedge funds resisted inflationary pressures, and volatile commodity and equity markets (See Opalesque Exclusive: here).

According to HFR, Asian hedge fund industry enjoyed positive perception from investors despite worries about the U.S. and European sovereign debt as attested by the new money poured into the region’s hedge funds industry.

Some hedge funds even find Asia as a safe haven despite the latest round of financial routs across the globe.
Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali