Tue, Sep 2, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Asian hedge fund industry contracts 5% in 1H 2011 to total assets of $145bn

Tuesday, September 27, 2011
Opalesque Industry Update - The AsiaHedge Asset Survey for 1H2011 shows that the Asian hedge fund industry shrank slightly in the first half of the year to total assets of $145 billion, as compared to $152 billion at the end of 2010. This reflects a 5% decline in the industry assets and a reversal of the robust recovery seen since the severe financial crisis of 2008, primarily due to strong macro headwinds and weak markets.

“While Asian hedge fund managers showed remarkable resilience and downward protection through a turbulent first half of the year, defensive portfolios unfortunately clipped returns and investors started applying the brakes to capital re-allocations they had begun to make to the region barely a year ago,” says Aradhna Dayal, editor of AsiaHedge in Hong Kong. “We need to remember though that at $145 billon, industry assets are still up 5% as compared to one year previously, and a recovery in sentiment and markets could well re-ignite the positive trend.”

The positive news, however, is that redemptions this time have been fund-specific and not the sort of large-scale, industry-wide redemptions as seen in 2008. “Asian hedge funds have strategically reworked their investor base over the past three years and the presence of much more institutional, long-term capital this time round has been the single largest factor working in favour of the industry,” says Dayal.

Interestingly, Asia-based managers now run US$109 billion or a record 76% of the industry assets. “Several factors are propelling this trend. These include the growing AUM’s of the increasing number of locally-managed spin-offs and established big boys in Asia, as well as an increasingly serious commitment by global hedge funds to their Asian offices,” notes Dayal.

Hong Kong consolidated its position as the largest centre for the management of Asian hedge fund assets with a nearly 27% of the market share—a reflection of its status as the international hub for the CNH (offshore Renminbi) market, a well regulated destination with few shorting restrictions and smooth access to the region’s top talent as well as China opportunities.

Meanwhile, Asia ex Japan equity hedge fund strategies emerged as the largest fund category in Asia in 1H2011, with US$28 billion in assets.

Looking forward, AsiaHedge sees a relatively tough second half for the Asian hedge fund industry, with managers needing to bring back the performance to keep investors committed. “We expect capital inflows to remain tepid in the coming months, but believe that a speedy resolution of the issues in Europe and the US will prompt investors to deploy their heavy cash reserves and re-accelerate the industry growth,” says Dayal. “Sustainability of businesses, institutionalisation and adaptation to new regulatory regimes will emerge as key concerns for managers.” Corporate website: Source

- FG

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. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the study

  2. Legal – GE Capital and Petters-related hedge fund in legal battle, SEC sanctions Donald Brownstein's hedge fund over conflicts of interest[more]

    GE Capital and Petters-related hedge fund in legal battle From Startribune.com: A billion-dollar legal battle is brewing in Florida over who knew what and when about the decade-long Ponzi scheme operated by former Wayzata businessman Tom Petters. The bankruptcy trustee for two failed Flo

  3. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  4. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  5. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius