Asia Hedge Fund Startups
Investors Pulling Away from Asian Hedge Fund Startups
Asian hedge fund startups are hurting and even shutting down as fund of funds, seeders and investors pull back capital from the funds. Many Asia-focused hedge funds benefited from the favor of investors after the 2008 crisis but now are facing heavy redemptions in favor of larger funds and funds in other parts of the world.
Asia-focused hedge funds that were started with the help of a major backer after the 2008 credit crisis are shutting down as a shrinking pool of key investors makes it harder for them to raise capital.
Isometric Investment Advisors Ltd. decided in December to close after its largest startup investor said it would withdraw its cash. Black’s Link Capital Ltd. closed after its biggest investor, a U.S.-based fund of hedge funds, pulled its capital last year, said two people with knowledge of the matter.
New hedge funds that began trading after the collapse of Lehman Brothers Holdings Inc., including those run by refugees from investment banks, were expected to lead a revival for the industry. Instead, managers with more than $5 billion have lured the bulk of allocations, while a more recent crop of large startups are diverting investors from smaller competitors.
“Funds of funds have traditionally been early-stage investors,” said Sam Tabar, head of Asia-Pacific capital introductions atBank of America Corp. (BAC)’s Merrill Lynch & Co. unit. “As this sector has retracted somewhat, it has made it more difficult for some managers to move from startup phase to critical mass.” Source
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