Giants Dominate New Asian Hedge Fund Inflows

Feb 23 2012 | 5:03am ET

Asia's hedge fund birthrate may be shrinking—and its mortality rate growing—but those firms that do manage to get off the ground in the region are growing.

The 58 hedge funds that debuted in the region last year raised US$4.43 billion, according to AsiaHedge. The 15% increase from 2010 almost doubled the average launch size up to US$76.4 million, thanks in large part to two major launches from two big industry players.

Former Goldman Sachs proprietary trading chief Morgan Sze's Azentus Capital debuted with more than US$1 billion, while former Highbridge Capital Management Asia chief Carl Huttenlocher's Myriad Asset Management garnered US$300 million.

"The reality is that not all of it is new capital flowing into Asia," AsiaHedge's Aradhna Dayal said of the US$4.43 billion raised. "After a hiatus of almost two years, a few highly regarded traders/hedge fund managers finally succeeded in launching their own ventures last year, which gave many international investors an opportunity to recycle or trade up their Asia allocations."

Indeed, in spite of the new hedge funds' success, raising more in one year than they had since 2007, the Asia hedge fund industry actually shrank, both in terms of assets under management and number of funds, in 2011.

Most of the money raised by new hedge funds last year went to multi-strategy shops, including Azentus and Myriad. And most of the new hedge funds, 20, including Azentus and Myriad, came out of Hong Kong, with 17 launched in Singapore.

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