Asia-Pacific industry turns a corner as investor capital returns

Wed Mar 31, 2010

Paul Storey, Aradhna Dayal and Wing Yung Lok, AsiaHedge

Following the debacle that occurred in 2008, the Asia-Pacific hedge fund industry staged a recovery in 2009 - but only partially. Global quantitative easing policies and the resulting liquidity drove most of the world's stockmarkets, bar Japan, resolutely northwards. The region's surviving hedge funds profited handsomely with the AsiaHedge Composite median up 15.92% for the year, a very substantial improvement over a poor result of minus 14.79% in 2008. However, a strong performance on the back of a no-brainer market, stimulated by ample quantities of free cash, can be somewhat misleading. By comparison, the MSCI Pacific Free index - the key regional benchmark - rose by 24.2%.

Probably more important is the fact that the Western investors, who pulled their capital out of the industry in 2008 when the credit crunch was at its height, have not really returned yet -...

ISSN: 2151-1845 / CDC10004H

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