Opalesque Industry Update: According to the latest AsiaHedge New Funds Survey, there were 53 new
Asia-Pacific hedge funds raising a combined $2.13 billion in the first half of 2010, despite one of the toughest
asset raising climates globally. Interestingly, Hong Kong emerged as the destination choice for a majority of
these new fund launches, accounting for 65% of the new funds, leaving behind Singapore by a wide margin.|
The $2.13 billion figure is an increase of 90% over the $1.12 billion raised by new funds in the first half of last year and 43.6% over the $1.48 billion assets raised in the second half of 2009. The number of launches for this year is also up 36% compared to 39 new funds in first half of 2009.
However, not all of it represents new money coming into the region. “We need to understand that much of it is a result of redistribution of assets between funds in Asia rather than being net new allocations. In short, a classic recycling effect,” says Aradhna Dayal, Editor of AsiaHedge, based in Hong Kong.
Hong Kong has been the largest beneficiary this year and recorded 32 new funds launches in the first half of 2010, raising approximately $1.5 billion or two-thirds of the total assets raised by new funds. This is in sharp contrast to Singapore with only 9 launches, raising only $183 million in assets.
Going forward, the environment for hedge funds looks tough. “We anticipate an accelerated consolidation within the industry by the end of the year, given that the performance has been largely flat and capital arteries are still blocked,” adds Dayal. “With operational costs rising and the macro economic scenario looking uncertain, unless things change we would expect more of the smaller managers to face increased business risk – which may well result in an increase in the shutdown rate and/or further consolidation through mergers and acquisitions.” Corporate website: Source