Asian Hedge Funds Manage $88B

Feb 6 2013 | 11:52am ET

Asian hedge fund assets under management have returned to pre-crisis levels, rising 7.5% on the year to hit $88.25 billion as of the end of 2012.

The gains were led by funds investing in China, India and Japan, reports Hedge Fund Research, with China funds gaining 9.4% in 2012 (8.0% in Q4), India funds adding 27.6% in 2012 (4.3% in Q4) and Japan funds adding 8.1% on the year (2.5% in Q4). Chinese and Indian funds beat their respective stock markets in 2012, while Japan funds trailed the Nikkei 225.

Total capital increased by $3.9 billion in Q4 2012 on net inflows of $117 billion, concentrated in emerging Asia.

The overall hedge fund industry saw its assets hit a record $2.25 trillion in 2012.

As of the end of last year, there were 1,150 Asian hedge funds, 31.7% of which were based in China. That represents a 5.3% increase in overall Asian hedge funds and a 28.6% increase in China-based funds.

The percentage of Asian hedge funds  located in Japan and India also increased in the past year, while the percentage of funds located in Singapore and Australia—the second- and third-largest centers for Asian-domiciled funds—declined in 2012.

“The Asian hedge fund industry was well positioned for the series of important Asian macroeconomic development which occurred in the 4Q, including moderating growth throughout emerging Asia, the Japanese elections and the dramatic impact of the BoJ stimulus plan and inflation target increase on Japanese currency and equity markets,” stated Kenneth J. Heinz, president of  HFR.

“Asian investors continue to exhibit preference for tactical exposure to powerful trends in Japanese currency and equity market  trends with a bias toward continued weakening of the Japanese yen. As this dynamic environment continues to evolve, Asian-focused  ­ and trend-following, quantitative macro systematic CTA strategies are likely to capture and benefit from these powerful  trends.”

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