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Alternative Market Briefing

Number of Asian hedge fund start ups fall third year to 27 so far in 2016

Wednesday, October 19, 2016

Komfie Manalo, Opalesque Asia:

The number of hedge fund launches in Asia entered its slowest pace, with Singapore-based Eurekahedge noting only 27 new launches from January to September this year, the lowest figure since 2000 when 56 funds opened, Bloomberg said.

The data provider added that this is the third straight year hedge fund launches in the region fell. Last year, 83 new hedge funds were launched in Asia, data showed.

"The capital-raising environment for newer launches is quite difficult to put it mildly, and with existing offerings out there returning low-single digits over the last three years investor appetite is quite selective," Eurekahedge senior analyst said Mohammad Hassan said.

Hassan said that poor performance and high fees are discouraging investors to allocate into the hedge fund industry. And should investors decide to allocate their money into the $2.9tln global hedge fund space, they prefer bigger and more established player, usually those with at least $500m in assets, thus making it more difficult for start up managers to raise capital.

Peter Douglas, a Singapore-based principal at CAIA Association, added that poor returns, declining fee income, and rising operational and regulatory costs, present serious challenges to aspiring hedge fund managers from opening shop.

Douglas said, "Investors ......................

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