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From Precy Dumlao, Opalesque Asia:
In its latest white paper entitled: "Does size matter," Singapore-based consulting firm GFIA pte Ltd. said there is a clear correlation between the size of the fund and its returns in the Asian hedge fund universe. In its study, GFIA noted the following:
*US$250m to US$750m is the clear sweet spot, characterized by superior returns and lower volatility of underlying funds;
* Fund of different sizes have highly correlated returns though smaller funds have slightly bigger drawdowns;
*Funds running less than US$20m underperformed significantly
* US$50m to US$250m is a clear sweet spot characterised by superior returns and lower volatility of the underlying funds; and
* Very varied returns among funds of different sizes though volatility was much lower compared to equity strategies.
The consulting firm studied 377 funds that reported to AsiaHedge from 2007 through mid 2009 and categorized them into five strategies, namely: Asian Equity ex Japan (72), Asian Equity inc Japan (75), Chinese Equity (79), Japanese Equity (96), and Macro/Multi-Strategy (55). These funds are then subdivided into six different categories according to their size (in assets). US$20m (98),
US$20 m to US$50m (85), US$50m to US$100m (79), US$100m to US$250m (66), US$250 to US$750m (39), and US$750m and up (10).
Interestingly, the study found that 70% of the fun...................... To view our full article Click here
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