Mon, Nov 24, 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. Regulatory - Stringent rules for hedge funds make the financial system fragile[more]

    From FT.com: …It is one thing to impose a regulatory burden when there is a clear need to do so. Banks are underwritten by taxpayers via deposit insurance as well as the too-big-to-fail safety net; they need to be reined in, and if they shrink as a result, that may be welcome. But it is another thin

  2. Investing - Apple: Hedge funds are crazy about it, Greenlight Capital took stake in Citizens Financial after IPO, Tiger Global added to Hertz, exited Dollar General last quarter, Oberweis sells NQ Mobile stake as Valiant adds shares, Whitney Tilson sticks to losing bet on MagicJack shares, Brigade Capital backs €90m Quinn sale[more]

    Apple: Hedge funds are crazy about it From Techinsider.net: Apple Inc. is still the most popular stocks among hedge funds. According to a recent report by hedge fund tracking site Insider Monkey, more than one out of 5 hedge funds are invested in Apple Inc. At the moment there are

  3. Greenlight Re CEO says hedge fund reinsurance strategy buzz is validating[more]

    From Artemis.bm: The attention being paid to the hedge fund reinsurance business model and the fact that others are now looking to leverage bits of it within their own strategies, is validating for reinsurer Greenlight Capital Re, according to CEO Bart Hedges. There has been an increasing buzz

  4. Legal - Hedge fund manager fights £8m tax tribunal ruling[more]

    From FT.com: A hedge fund manager who may have to repay £8m in tax is trying to overturn a tribunal ruling that found he had attempted to shelter millions in an avoidance scheme. Patrick Degorce, chief investment officer at Theleme Partners, lost a tax tribunal case last year. HM Revenue & Customs c

  5. Europe - Hedge funds face exit tax as Iceland central bank discusses plan[more]

    From Bloomberg.com: Hedge funds and other creditors with claims against Iceland’s failed banks face an exit tax as the island looks for ways to unwind capital controls without hurting the economy. The government targets having a plan it can present by year-end that would map out how Iceland will sca