Asia Banks Hedge Funds
Asian Private Banks Prefer Event-Driven Hedge Funds
Private banks in Asia are telling clients to place their money in hedge funds and especially favoring
event-driven hedge funds. The banks are expecting an uptick in mergers and acquisitions activity and debt restructuring. With the overall market uncertain so far this year, the banks expect
event-driven hedge funds to excel over other strategies.
Unlike in 2009 when stocks rallied across the board, the overall market direction is less certain this year and the best returns will likely come from event-driven managers who can better navigate the twists and turns in M&As compared with traditional long-only and exchange-traded funds (ETFs).
In debt markets, corporate and emerging market spreads have narrowed significantly, and outsized gains will come from sorting out the over $400 billion (279 billion pounds) in leveraged loans from the buyout bubble that will mature in the next few years, private bank investment strategists polled by Reuters said.
"The event-driven is our top strategy... We've recently gone positive on that strategy, and part of the reason is because we expect to see a lot more event-driven deals like mergers and distressed," said Karen Tan, director of the hedge fund group at Deutsche Bank Private Wealth Management in Singapore. Source
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