Asia hedge funds add $ 20 b in 2010, manage $ 152 b

Wednesday, 23 March 2011 01:18 -     - {{hitsCtrl.values.hits}}

HONG KONG (Reuters): Asian hedge funds added $20 billion to their assets in 2010, backed by positive returns and accelerated flows in the second half of the year as investors returned to bet on the fast growing region.

Assets under hedge funds focused on the region rose to $152.3 billion in 2010, up from $132.2 billion a year earlier, a survey by fund tracker AsiaHedge released on Tuesday showed.

About half of the asset growth was due to net inflows with 95 new hedge fund launches contributing $3.84 billion to the asset growth in 2010, an increase of 50 percent from a year earlier.

While investors globally opted for large and established hedge fund brands in 2010, the inflows in Asia went to a wider base of home-grown managers.

“Several of the post-crisis start-ups had built up decent track records by mid-2010, and were well poised for gaining these allocations as the capital moved back into Asia,” said Aradhna Dayal, editor of AsiaHedge in Hong Kong.

The industry assets grew by 10 percent in the second half, twice the rate in the first half of 2010.

Funds such as Senrigan Capital, seeded by Blackstone, quadrupled assets to above $800 million last year. Others such as Turiya Capital, launched by ex-Goldman Sachs executive Davide Erro and Orchard Capital, which spun-off Stark Investments in 2009, also saw assets growing to close to $500 million.

Assets also continued to move to Asia, with 74 percent of the industry assets being managed from within Asia by end-2010 as compared to 71 percent in 2009, the survey showed.

Hong Kong was the top destination for hedge funds in the region with a market share of 25 percent.

Interest in the region is on the rise with the Asia Pacific emerging as the top-ranked geography for net investor demand in 2011, according to another survey released by the prime broking unit of Credit Suisse earlier this month.

Nearly half of the more than 600 investors surveyed by Credit Suisse said they had demand for exposure to the region which contributes about a fifth to the global hedge fund assets of about $1.9 trillion.

“Asia is emerging as a major new geo-political and investment nucleus globally, and we are seeing a migration of not just assets of Asian funds but also international hedge funds and world-class hedge fund talent to Asia,” Dayal added.