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HFRI China Index up +13% in April (18.76% YTD); Asian hedge fund capital surges to 750bn RMB

Thursday, May 14, 2015
Opalesque Industry Update - Hedge funds investing in China surged to a record monthly gain in April, as trading volume on the Shanghai-Hong Kong Stock Connect program soared and the Chinese Central Bank reduced interest rates, with the HFRI China Index up +13.0 percent in April 2015, the strongest monthly gain since Index inception in 2008.

Total global capital invested in the Asian hedge fund industry surpassed the milestone of $120 billion ($120.75 billion, 750 billon RMB, 14.5 trillion ¥ Japanese Yen) to begin 2Q15, as the number of Asian hedge funds approached 1,200, according to the latest HFR Asian Hedge Fund Industry Report, released today by HFR®, the established global leader in the indexation, analysis and research of the global hedge fund industry. Total capital invested in the hedge fund industry increased to a record $2.95 trillion to begin 2Q15.

The HFRI EM: Asia ex-Japan Index returned +10.5 percent in April, the strongest gain since the Index gained +11.3 percent in December 1999. Through the first four months of 2015, the HFRI China Index and HFRI EM: Asia ex-Japan Index have climbed +18.8 and +14.5 percent, respectively, following more muted gains from 2014.

Inflows into Asian hedge funds through the end of 1Q15 totaled $1.1 billion USD, the tenth consecutive quarter of inflows, with capital moving into Emerging and Pan-Asian funds only partially offset by outflows from Japanese-focused funds. Asian hedge fund inflows were also concentrated in Equity Hedge strategies, with these receiving inflows of $1.44 billion, partially offset by outflows across other strategies. Total hedge fund capital invested in Emerging Asia increased to $52.5 billion (325 billion RMB), while capital invested in Pan-Asian hedge fund strategies increased to $39 billion (242 billion RMB). Total Asian hedge fund capital invested in Japan declined slightly to $29.2 billion (3.5 trillion ¥ Japanese Yen). The HFRI Japan Index advanced +5.0 percent in April and has gained +7.8 percent YTD 2015, following a gain of +3.5 percent in 2014.

“Recent developments with Chinese equity markets, including performance and trading volume, are both exciting and historic in magnitude, with significant involvement and participation from Asian-focused hedge funds attracting capital and interest from global investors,” stated Kenneth J. Heinz, President of HFR. “As exciting as the environment has been, it is likely that the Asian hedge fund industry is only now at the beginning of a capital growth cycle, as global investors position for continuation and extension of these gains, while seeking to use sophisticated strategies to protect their portfolios from the volatility inherent in these markets.”

press release

www.hedgefundresearch.com

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