Recovery stalls as Asia-Pacific assets shrink 5% in H1 2011 to $145bn

Mon Sep 26, 2011

Strong macro headwinds and plummeting markets have slowed down the Asian hedge fund industry’s recovery since the financial crisis, leaving assets down 5% at the end of 1H 2011 at $145 billion. Nevertheless, locally based managers continue to account for a rising proportion of assets in Asia-Pacific funds, with 76% of industry AUM now in funds managed in the region

We undoubtedly live in interesting times. Overturning a recent recovery, the AsiaHedge Asset Survey for 1H 2011 shows a marginal contraction of 5.08% in Asian hedge fund assets in the first half of the year, with the industry ending the period at $144.65 billion as compared to $152.39 billion at end-2010.

While Asian hedge fund managers showed remarkable resilience and downward protection through a turbulent first half of the year, defensive portfolios clipped returns and capital streams began drying out too, leading to a slight dip in overall assets. We need to remember though that at $144.65 billon, industry assets are still up 5.01% as compared to one year ago (from $137.75 billion at end-June 2010) and a recovery in the sentiment and markets could well re-ignite the climb back up.

Recovery falters on macro concerns

The first half of 2011 started off rather...


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