Sat, Aug 27, 2016
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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new