Despite difficult macro environment, new fund landscape in Asia remains surprisingly vibrant

Thu Jul 19, 2012

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$2.02 billion raised by 32 new funds in 1H2012


• New funds raise 50% more assets than in second half of 2011
• Average launch size in Asia now up to more than $63 million
• Multi-strategy funds dominate while Asia ex Japan funds make an impact too
• Hong Kong still the top centre with 20 recorded new launches, Singapore loses market share

Hong Kong, July 20, 2012 - The latest AsiaHedge New Funds Survey shows a sustained interest in Asian hedge fund start-ups, with 32 new funds harvesting as much as $2.02 billion in assets in the first half of 2012.

This is 50% higher than the $1.34 billion raised by 30 new funds in the second half of 2011, although slightly lower than the $3.09 billion raised in 1H2011 – a figure that had been boosted by the mega-launch of Azentus, one of the biggest new funds in the world since the financial crisis.

"These are fairly healthy numbers given the highly challenging macro climate and investor consolidation we have seen this year, and largely reflect the world-class managerial talent launching in Asia now," says Aradhna Dayal, head of Asia for HedgeFund Intelligence in Hong Kong. "US allocators were probably the largest contributor to the start-up capital this year, though we are seeing a new breed of Asian family offices and high-net-worth individuals emerge as silent but serious backers of several new smaller hedge funds."

Most of the inflows into new hedge funds flew into a select few names in Asia, including second-generation managers with a solid pedigree, operational platforms and extensive teams.

Average launch size grew to $63.25 million (as compared to $44 million recorded in second half of 2011) reflecting this flight to quality.  "The rising barriers to entry has ensured that only high-quality and scalable strategies are coming to the market, which is good news for institutional investors who have found it frustrating in previous years to find enough managers in Asia with the credibility and scale to take in larger tickets of $50-100 million," says Dayal.

Hong Kong consolidated its position as the location of choice for start-ups in Asia, with new funds raising $1.75 billion or well over 80% of total assets raised in 1H2012. Singapore lost ground slightly, with relatively few launches in the first half, making up for $170 million.
 
Strategy wise, Multi-strategy funds were most in demand, accounting for $944 million or 46% of all new fund assets raised in 1H2012. Asia ex Japan funds followed at over $201 million, Japan-focused funds came back to life at $170 million, and China funds garnered about $50 million. Event-driven, arbitrage and macro strategies, which saw a significant interest last year, saw relatively few launches in 1H2012.

Looking forward, the second half of 2012 seems more promising for the Asian start-up scene. "We anticipate  several high-quality launches, aided by better macro clarity post the US elections and a desire on the part of global allocators to correct their structural under-allocation to Asia," notes Dayal.

To read the full report in the July/August 2012 edition of AsiaHedge, please contact Shaun Rajiah on srajiah@hedgefundintelligence.com +44 207 779 8367

For more information, please contact:

Sophie Sophaon
Walek & Associates (Hong Kong) Limited  
Telephone: +852 2273 5102 / Mobile: + 852 6112 7553
Email: ssophaon@walek.com

Aradhna Dayal
Editor, AsiaHedge
Telephone: + 852 2551 2444 / +852 9231 3350
Email: aradhna@hedgefundintelligence.com

ISSN: 2151-1845 / CDC10004H