Asian Hedge Funds Investors

Asian Hedge Fund Investors

Investors Return to Asian Hedge Funds in Second Quarter

Investors are returning to Asian hedge funds after a terrible first quarter. In Q2 2010, investors committed more than $360 million to hedge funds in Asia showing a renewed confidence. That is after investors pulled a whopping $810 million from hedge funds in the region during the first quarter of the year.
Investors returned to Asia-focused hedge funds and allocated over $360 million in new capital over the second quarter, reversing an $810 million capital outflow in the first quarter, according to Hedge Fund Research.

HFR said the new capital was clustered around the theme of a more flexible Chinese currency policy, though some investors also shifted assets from dedicated emerging Asia funds into funds focused on Japan and broadly across the continent.

The fund inflow could be a result of outperformance in some Asian funds versus their global peers. Asian equity hedge funds recorded a $1.7 billion increase in assets as a result of strong performance in the second quarter, in sharp contrast to the $23 billion performance-based decline experienced by global funds employing the same strategy, HFR said.

However, the total capital invested in Asian-focused hedge funds declined to $74.4 billion at the end of June, from $77.1 billion at the end of the first quarter, as performanced-based losses offset the impact of new investor capital, HFR said. The HFRX Asia Composite Hedge Fund Index shed 3.52% in May and 0.64% in June, as Asian equities markets were battered alongside global peers. Source

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