Asian Hedge Fund Report

• Main Author: TEO, Melvyn
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2012
• Subjects: hedge funds; Asian hedge funds; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/bnp_research/29; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1024&context=bnp_research
• Institution: Singapore Management University

We survey the Asian hedge fund landscape and shed light on the size, investment region, strategy, and performance metrics of funds operating in Asia. Our findings indicate that hedge funds in the region typically maintain close physical proximity to their investment markets. Institutional quality hedge funds with assets under management greater than US$100m tend to focus on Greater China and Japan. Relative to Hong Kong, Japan, and Australia, Singapore harbors the most diverse group of hedge funds in terms of investment strategy. Between January 2000 and December 2011, Greater China focused funds have on average outperformed hedge funds investing in other regions while India focused funds have underperformed. Over the same period, the alphas of CTA/managed futures, macro and event driven funds have eclipsed those of fixed income, multi-strategy, and equity long/short funds. Given the presence of capacity constraints at the strategy level and the significant number of equity long/short funds operating in Asia, our findings suggest that Asian equity long/short may be overcrowded. On balance however, hedge fund performance in Asia appears to be driven more by investment geography than by investment strategy.