Sun, Apr 19, 2015
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. Studies - Fund managers bullish on equities, alternative asset classes, Hedge funds starting to spurn emerging markets, Insurance companies take aggressive approach to hedge funds despite restricted exposure[more]

    Fund managers bullish on equities, alternative asset classes From Benefitnews.co: Asset allocation and risk continue to be the top issues for institutional investors in 2015 and, while nobody is sure what the economy will do in 2015, investment fund managers remain positive about investm

  2. Investing - New hedge fund strategy: Dispute the patent, short the stock, David Einhorn bets on AerCap as leasing company avoids turbulence, Top hedge funds reveal these best investing ideas, Hedge funds bet big on PetSmart price bump, Victory Park Capital increases investment in upstart to $500m[more]

    New hedge fund strategy: Dispute the patent, short the stock From WSJ.com: A well-known hedge-fund manager is taking a novel approach to making money: filing and publicizing patent challenges against pharmaceutical companies while also betting against their shares. Kyle Bass, head of Hay

  3. Tiger Global falls 2.9% in March, down 5.3% in Q1[more]

    From Reuters.com: Investment firm Tiger Global Management, one of the hedge fund industry's most closely watched players, told clients that its hedge fund lost 5.3 percent during the first quarter, an investor said on Wednesday. Much of the decline came in March when the fund lost 2.9 percent,

  4. It’s not just hedge funds—IMF study finds stability risks from ‘vanilla’ funds[more]

    From MarketWatch.com: Leveraged hedge funds and banklike money-market funds are the parts of the asset-management industry most associated with risks to financial stability. But a report from the International Monetary Fund suggests that “plain-vanilla” mutual funds and exchange-traded funds also ca

  5. Hedge funds gain 2.4% in Q1 driven by currency and commodity markets[more]

    Komfie Manalo, Opalesque Asia: Hedge funds posted positive results last March to conclude a strong first quarter, with performance driven by strong macro trends in currency and commodity markets, complemented by broad-based gains and positioning in event driven, equity hedge and fixed income-b

 

banner