Sat, Nov 1, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Politics and policy drive year-end gains for Asian hedge funds

Wednesday, February 06, 2013

Kenneth J. Heinz
Opalesque Industry Update - The Asian hedge fund industry posted strong gains to conclude 2012, led by hedge funds investing in China, India and Japan, as capital invested in the Asian hedge fund industry increased by 7.5 percent for 2012, according to the latest HFR Asian Hedge Fund Industry Report, published by HFR, the established global leader in the indexation, analysis and research of the global hedge fund industry. Total hedge fund capital invested in the Asian hedge fund industry increased to $88.25 billion (¥ 8.17 trillion, RMB: 555 billion), the highest level since 2007, prior to the Financial Crisis.

Total capital increased by $3.9 billion in 4Q12 on a net new inflow of $1.17 billion concentrated in Emerging Asia. Total capital invested in the hedge fund industry globally increased to a record level of $2.25 trillion (¥ 208 Trillion; RMB 14 Trillion) as of year-end 2012. The HFRX China Index posted a gain of +8.0 percent for 4Q12 and +9.4 percent for the full year, in line with the 4Q gain for the Shanghai Composite but outperforming Chinese equities for the full year as economic growth and inflationary pressure slowed into year end.

The volatile HFRX India Index gained +4.3 percent for 4Q12 and +27.6 for 2012, topping the gain of the Mumbai Sensex 30 and leading all regional hedge fund indices for 2012. Japanese elections and the ensuing economic policy stimulus resulted in strong year end gains for the Nikkei 225 and a sharp decline in the Japanese Yen, which traded at a 27-month low against the US dollar. The HFRX Japan Index gained +2.5 percent in 4Q12 and +8.1 percent for 2012, trailing the strong year end gain for Japanese equities. The HFRX Korea Index posted a narrow decline of -0.25 percent in 4Q12, in line with the Kospi Index.

The total number of Asian hedge funds increased by +5.3 percent in 2012 to nearly 1,150 with almost a third (31.7%) of all Asian hedge funds are located in China, an increase from 28.6 percent as of year-end 2011. The percentage of Asian hedge funds located in Japan and India also increased in the past year, while the percentage of funds located in Singapore and Australia, which represent the 2nd and 3rd largest share of Asian-domiciled fund locations, declined in 2012.

“The Asian hedge fund industry was well positioned for the series of important Asian macroeconomic developments which occurred in the 4Q, including moderating growth throughout Emerging Asia, the Japanese elections and the dramatic impact of the BoJ stimulus plan and inflation target increase on Japanese currency and equity markets,” stated Kenneth J. Heinz, President of HFR. “Asian investors continue to exhibit preference for tactical exposure to powerful trends in Japanese currency and equity market trends with a bias toward continued weakening of the Japanese Yen. As this dynamic environment continues to evolve, Asian-focused Equity Hedge and trend-following, quantitative Macro Systematic CTA strategies are likely to capture and benefit from these powerful trends.”

PD

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. Macks aim to raise $750m for real estate debt fund[more]

    From Therealdeal.com: Father-son duo William and Richard Mack and former Blackstone Group managing director Peter Sotoloff are starting a new real estate debt fund. Together, the trio hopes to raise more than $750 million for the private equity fund, according to the Wall Street Journal. The fund wi

  2. Manager Profile - Seth Klarman: Lessons for retail and institutional investors[more]

    From Valuewalk.com: Seth Klarman is virtually unknown outside value circles, despite his impressive record and value of assets under management. On average Baupost has returned 19% p.a. despite holding a large portion of its assets in cash. During the financial crisis, Seth Klarman’s funds lost some

  3. North America - FATCA leads 75% of U.S. expats to consider dropping citizenship[more]

    From International-adviser.com: Nearly three quarters of American expats are considering the renouncement of their citizenship following July’s introduction of the “absurd” Foreign Account Tax Compliance Act (FATCA). The findings, which were revealed in a survey by deVere, come alongside the news th

  4. New app allows asset managers easy interaction with portfolios, securities, holdings, transaction details[more]

    Komfie Manalo, Opalesque Asia: Global financial services software company SS&C Technologies Holdings has launched Explorer, a powerful data visualization and analysis tool that turns critical investment data into meaningful information. Explore

  5. Opalesque Exclusive: Mariner’s new healthcare mandate applies strategic approach across pharmaceutical and biotech sectors[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A team of two was hired in February this year t