Skip to content


Capital inflows to Asian hedge funds decline

The second quarter of 2008 saw Asia-focused hedge funds around the world gain capital inflows of $530 million from investors, says Chicago-based Hedge Fund Research. But the industry’s total assets under management grew by a mere 0.25% (about $200 million to $100.48 billion) because managers have lost $320 million in volatile markets.

And while the industry did enjoy net inflows from investors in the second quarter, the gain is nearly half the $1 billion gain from the first quarter, suggesting that investor interest is flagging.

As absolute-return vehicles, hedge funds are failing the test this year. Those Asia ex-Japan-focused strategies tracked by HFR have in aggregate lost -15.86% year-to-date, while Japan-only strategies have lost -7.14%, and Asia including Japan strategies are down -8.29%.

They are in aggregate doing better than benchmark indices such as the S&P500 with dividends (-11.9%), Japan’s Nikkei 225 (-12%), India’s Sensex (-33%) and Chinese equities (-45%). But investors aren’t paying hedge-fund fees for relative performance.

Certain strategies are flourishing: arbitrage strategies have done well, enjoying asset growth of $730 million. Multi-strategy products have gained inflows of $720 million. And the niche area of fundamental growth-equity has surged by $1.19 billion.

But event-driven strategies have seen net assets tumble by $525 million, while general equity hedge strategies (which account for over 63% of AUM and 74% of the total number of Asia-focused funds) have lost over $600 million in capital. Market-neutral equity and fundamental-value strategies together suffered capital withdrawals of $1.1 billion.

One reason for the pain among Asia-focused players is the overweening role of equity long/short strategies, at a time when favoured sectors such as macro are thin on the ground, notes Kenneth Heinz, president of HFR.

Source: Asian Investor

Posted in Main Page.


No Responses (yet)

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.



Some HTML is OK

or, reply to this post via trackback.



Disclaimer: The www.hedgefundsindia.com website solely provides information about HEDGE FUNDS INDIA space. No data or statement herein is or should be construed to be a recommendation for the purchase, retention, or sale of the securities referred to herein and we accept no liability for the consequences of your reliance on this data and information. The value of investments and the income derived from them may fall as well as rise. The information in this website is based on data gathered from publicly available websites and other information mediums. We have not independently verified such information , do not represent it as accurate, true or complete, make no warranty, express or implied regarding it and shall not be liable for any losses, damages, costs or expenses relating to its adequacy, accuracy, truth, completeness or use. Investments in hedge funds, private equity, venture capital and other private investment funds are speculative and involve a high degree of risk. You could lose all or a substantial amount of your investment. This website does not list, and does not purport to list, the risk factors associated with an investment in any of the funds listed on this site. We do not represent any hedge funds, private equity or investment/financial advisors nor give any investment recommendations.