| 24 new funds raised $2.86 billion in H1 2011 in Asia|
Average launch size goes up in Asia due to higher barriers to entry
Multi strategy funds emerge as the largest strategy in assets terms for the first time, garnering $1.9 billion in assets
Hong Kong, July 19, 2011 The latest AsiaHedge New Funds Survey shows that new launches gathered as much as $2.86 billion in assets during the first half of 2011 breaking the dry spell of H2 2010 when only $1.09 billion was raised. The level of assets raised is also the highest yet since the pre-financial crisis peak of $5.7 billion raised in H1 2007.
Interestingly, this figure was achieved by merely 24 new launches that AsiaHedge recorded, barely one third of the number of 70 recorded new funds in H1 2010. Consequently, the average launch size has jumped up to $119 million in 2011 as compared to around $40 million in H1 2010.
These figures validate a number of trends we have been predicting for quite some time now, says Aradhna Dayal, the Hong Kong-based editor of AsiaHedge, the largest provider of dedicated hedge fund intelligence in the Asia-Pacific. The Asian new fund landscape continues to be reinvigorated, though the barriers of entry are the highest ever, resulting in only a handful of high-quality new managers being able to come to the market. These managers have to display a combination of solid pedigree, experience in managing a sizable chunk of assets and institutionalised platforms, adds Dayal.
Multi-strategy new funds attracted the most assets ($1.9 billion) for the first time, followed by event-driven strategies. This is a big leap from H1 2010 when multi-strats gathered merely $55 million. This reflects market maturity at three levels: market, investors and managers themselves, adds Dayal. As Asian capital markets continue to deepen, creating alpha-generating opportunities on not just equities but also in strategies that focus on other asset classes such as bonds, as well as though macro, arbitrage and event-driven approaches, more Asian managers are adopting a multi-strategy approach to gain from varying market cycles and asset classes. Investors, too, are looking for a more diversified alpha base from these managers. Post the financial crisis, with their growing asset sizes (especially those in the $1 billion-plus bracket) more Asian managers are opting for greater flexibility between strategies/asset classes to meaningfully deploy their capital.
The second half of 2011 reflects a healthy pipeline of new fund launches in Asia. Going forward, well see some quality launches from a combination of former star traders/second generation managers, international hedge fund shops that have been building operations in Asia, and new strategies or share classes coming out of successful post-crisis Asian shops that have reached $1 billion or more, and are soft/hard closed, notes Aradhna Dayal.
To read the full findings go to the AsiaHedge New Fund Survey
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