Thu, Apr 17, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Asia Pacific Intelligence

Alternative news from Asia Pacific for April included:

Thursday, May 09, 2013

The Opalesque AMB team reported on the GFIA hedge funds note for April, finding that there had been a significant spike in the number of Asian hedge funds with less than $10m in assets under management due to investor withdrawals and fund poor performance.

The firm also found that there were only six new hedge funds launched in 2012 with less than $10m in AuM. 29 funds were launched during the year.

"Of the 769 funds that report AuM regularly, 443 of them have less than $50m under management, the minimum level which we estimate management fees can support the operational expenses of a typical boutique in Asia - although this figure has likely increased over the past few years," the report says. "Currently, there are 212 funds with at least $100m under management, and a minimum 12 months operating history; this is the absolute minimum 'cut' which, in our experience, the majority of allocators are comfortable."

2012 saw a decrease in number of funds that were larger than $10m, except for the billion dollar fund category which saw an increase of one fund.

A second report on the GFIA note and other findings, found that Asian hedge funds have seen continued outflows over the year. "Total AUM for Asian Pacific funds decreased from $147bn in Dec 2011 to $135.5bn in Dec 2012, highlighting the difficulties managers are having in raising capital, unsupported by strong returns” the report said.

GFIA believes that as the hedge fund world consolidates, smaller funds will continue to face difficulties, as private capital appears to GFIA largely to have exited the hedge fund industry to seek better performance outside the world of financial investment, and large institutional investors limit their allocations to funds with longer track record and significant AUM base. “This shift in investor base will definitely drive a transformation in the Asian hedge fund industry as managers reposition their offerings and their firms, to be attractive for the dwindling number (albeit larger-ticket) allocations," GFIA said in its report.

This trend appeared to be supported by news that Hong Kong's Richland Capital is to shut down its hedge fund business, despite out-performing peers. Reuters reported that Richland was one of Asia's best-known hedge funds with some $100m under management, divided between two funds and that it advised on an additional $150m for wealthy clients. The hedge fund had been founded in 2006 by former HSBC Holdings Plc trader Alex Au with Eva Lo, who earlier worked at Credit Suisse Group AG, and had made money for its main Richland Asia Absolute Return Fund each year since launch, including a 5.3% gain in the challenging markets of 2008.

Asiahedge reported that 2012 had been a year of contrasts for the sector. Assets in the Asian hedge fund industry stand at $139bn, the publication found.

Opalesque ran two pieces by Komfie Manolo from Opalesque's Asia office this month with interviews with up and coming hedge fund managers from Asia. You can read these pieces here and here.

India and its fledgling hedge fund market received a great deal of attention this month, with a piece in Reuters widely re-reported around the world, detailing the activities of Indian hedge fund manager Kalpesh Kinariwala, who, the piece says, is so sure of his equity strategies in a country that has stumped foreign rivals that he sends a daily e-mail tracker of his performance - including to competitors.

The Reuters piece finds that Kinariwala's Capveda Capital (India) Advisory fund, which he runs from a modest office in a decrepit industrial estate in Mumbai, has returned 11.86% so far this year, outperforming average negative returns of 2% from India-focused foreign hedge funds.

Asia Pacific Intelligence reported on the Indian hedge fund sector in February an interview with academic turned fund manager, Dr Vinay Nair, founder and chief executive officer of Ada Investments who believes that in terms of hedge funds, India is currently similar to the US in the 1980s. "It's a very young market, ripe with inefficiencies and mispricing making it very appealing to alternative or hedge fund strategies" he said at the time.

Bloomberg's Business Week interviewed with Paamco's David Walter in Singapore, reporting that the $8.6bn U.S. fund-of-hedge-funds, is seeking to raise money from pensions and sovereign wealth funds in Asia to diversify its investor base.

Walter said that the company is looking at Asian managers employing relative value strategies and those investing in high yield stocks.

 
This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.
Asia Pacific Intelligence
Asia Pacific Intelligence
Asia Pacific Intelligence
Banner
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. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  2. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  3. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  4. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo

  5. Opalesque Exclusive: Pensions, endowments, family offices reconsider life settlement investments[more]

    Bailey McCann, Opalesque New York: Hedge funds were once the largest investors in the life settlement industry, now the industry is seeing more interest from pensions, endowments and family offices directly. Life settlements have always been considered a niche part of the investing landscape, an