When Iain Jenkins, co-founder of HedgeFund Intelligence, first floated to me the idea of an Asia-Pacific hedge fund publication in early 2000, we thought we would initially find about 100 or so funds to cover. In the event, AsiaHedge's first assets survey at the end of that year highlighted about 130 funds with aggregate assets under management of just over $12 billion. Nearly half of the industry's assets were managed out of the UK and US and Japan long/short strategies were well in the ascendancy.
The state of the global financial markets at that time, coming off the top of the global bubble in technology stocks, also meant that we knew that Asia-Pacific hedge funds were likely to face a dip in their fortunes - before the industry resumed what we both thought was likely to be a strong long-term growth trend. The other factor to consider back then was the Asian Financial Crisis, which was still young in people's memories. This included a still wary attitude towards hedge funds which had been targeted by the broader media as a leading catalyst in the Crisis.
What happened subsequently over the period of the 'Noughties' has since been well documented in this publication. The changes have been many, encompassed in the development of the industry into a much larger and broader, and largely ex-Japan centric universe. Mirroring the Asia-Pacific financial environment, the underlying growth trend over this period has definitely been upwards. But the industry has still been obliged to suffer the region's sharp and volatile cyclicality nonetheless.
For investors who know and understand the characteristics of these markets, such behaviour - including the relative cycles and performances of the Japan and ex-Japan markets - forms a natural part of their investment strategy within the region and can be played to good advantage. For those who are not ready to go the extra mile and really find out how the Asian markets behave, and there are seemingly still all too many in the West, investing in the region can be painful. From my personal point of view, watching such behaviour repeat itself over several cycles since the beginning of the 1980s, with the lessons remaining seemingly unlearnt, also carries a certain degree of pain with it, too.
So upon my departure from the Asian financial industry, after 30 years or so in various guises, the past 10 of which have been spent watching and writing about hedge funds, it is interesting to see that we all seemingly stand at yet another crossroads. This time one direction really does lead to the region's global economic ascendancy, although many obstacles lie in the way - and the certainty of this outcome is still far from yet assured.
The region's hedge fund industry, despite having received a battering over the period of the recent Credit Crunch, now looks to be in fairly rude health, too. The industry has of course been the beneficiary of quantitative easing this past year or so, which has allowed managers time and a chance to regroup and restructure, as well as the opportunity to make money in the markets.
As always, progress is relative. For managers based in Hong Kong and Singapore, prospects look good at this juncture for strong growth in the industry. They may yet become the world's leading hedge fund centres if the global industry continues to come under attack in Europe and the US from politicians and legislators. Certainly, the potential for these two locations, where taxes remain enviably low and shorting regulations remained unchanged over the period of the Crunch, look very strong indeed.
For me, as I head off to new pastures and different adventures, this is particularly warming. Despite growing strongly over the past 10 years, the Asia-Pacific hedge fund industry has nonetheless lagged behind the growth rates that we have seen in the bigger markets of the West. But hopefully this scenario will now change and the hare-like tendencies of the Western markets for example, will now defer to the more tortoise-like qualities that the Asia-Pacific still seemingly has to offer.
Personally, covering this industry over the past ten years has been a ball. The acknowledgements to good times and good people are legion. As I go I would like to offer my sincere thanks to all, along with my best wishes, and not least to my successor Aradhna Dayal. May the next ten years be as much fun and as eventful as the past ten have been.
Paul Storey, editor