Wed, Apr 1, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFR: Investors increase allocations to Asian, including Japanese, hedge funds in 1Q13 by 7.6% to nearly $95bn

Tuesday, May 07, 2013
Opalesque Industry Update – Investors increased allocations to Asian hedge funds in 1Q13 as stimulus measures, quantitative easing and increased bond purchases by the Bank of Japan drove gains across both Japanese equities and the HFRX Japan Index.

Total Asia-focused hedge fund capital increased by +7.6 percent in 1Q13 to nearly $95 billion (US) (¥ 9.4 trillion Japanese Yen, 584 billion RMB), reaching the highest level since Asian hedge fund capital peaked in 2007, 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. Investors allocated over $1.3 billion in net new capital to Asian hedge funds in 1Q13, the largest quarterly inflow since 3Q11, as the total number of Asian hedge funds increased to more than 1,150.

The HFRX Japan Index posted a gain of +11.7 percent for the quarter, the strongest quarterly gain since 4Q05, exceeding the 1Q13 gain of the S&P 500, although trailing the torrid gain of over +19.0 percent for the Nikkei 225. HFR estimates nearly 370 hedge funds invest primarily in Japanese capital markets, including equity, debt and currency, while an additional 270 funds invest across pan-Asia (including both Emerging & Developed) and over 500 funds invest in Emerging Asia. Hedge fund performance across Emerging and blended, pan-Asian exposure was also strong for the quarter, with the HFRX China Index gaining +6.9 percent, HFRX Equal Weighted Asian Index gaining +8.4 percent and the HFRX Asian (ex-Japan) Index gaining +6.7 percent; each outperforming the decline in the Shanghai Composite Index.

Reversing a portion of the strong gain of +27.6 percent from 2012, the volatile HFRX India Index posted a decline of -7.5 percent in 1Q13.

The trend toward establishing a hedge fund’s management firm in local Asian markets also continued, with the percentage of Asian hedge funds located in China, Singapore, Japan and India all increasing since 1Q12, while the percent of these located in the US and UK continues to decline. Nearly one third of all Asian hedge funds are now located in China, while nearly 11 percent are located in Singapore; the number of funds located in Japan and Australia combined for over 9 percent.

Despite the development of sophisticated Macro, Relative Value Arbitrage and Event Driven strategies, the Asian hedge fund industry continues to be heavily skewed toward equity sensitive exposures; over 70 percent of all Asian hedge fund capital continues to be concentrated in Equity Hedge strategies, compared with nearly 27 percent for the overall global hedge fund industry. Although the macro environment for currency trading has been dynamic, only about 5 percent of Asian hedge funds are Macro hedge funds, including quantitative CTA and Discretionary Macro funds which invest long and short across equity, fixed income, currency and commodity strategies.

“The past four months have been an unprecedented period for Japanese capital markets and have created tremendous opportunities for Asian hedge funds in 2013,” stated Kenneth J. Heinz, President of HFR. “Aggressive stimulus measures by the Bank of Japan have not only created opportunities in Japanese equity markets, but also driven down yields in global fixed income markets, increased currency volatility and contributed to recent commodity volatility as the global growth and inflation picture continues to evolve. Hedge funds in Japan and throughout Asia will continue to benefit from these developments and are likely to attract increased investor capital to access these powerful and pervasive market trends.”

(press release)

HFR (Hedge Fund Research, Inc.) is the global leader in the alternative investment industry, specializing in the indexation and analysis of hedge funds. www.hedgefundresearch.com

Bg

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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. Other Voices: The role of diversification in CTA portfolios[more]

    2014 brought a resurgence of managed futures strategies, or CTAs, which performed very well as a whole, outperforming all other hedge fund strategies. However, a closer look reveals that there was a wide range of performance, or return dispersion, across managers. The bottom line? Not all CTAs

  4. Neuberger Berman unit buys 20% stake in activist hedge fund Jana Partners for $2bn[more]

    Komfie Manalo, Opalesque Asia: Neuberger Berman’s unit Dyal Capital Partners bought a 20% stake in activist hedge fund firm Jana Partners worth $2bn, WSJ.com reports. The deal comes as activi

  5. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

 

banner