In 2009, 78 Asian funds were launched with a total of $2.6 billion.
“Despite a slightly lackluster second half, new Asian hedge fund launches continued to see a sustained interest, though rising barriers to entry meant that most of the capital went to either second-generation managers with a strong pedigree or new offerings from established hedge fund shops,” says Aradhna Dayal, editor of AsiaHedge in Hong Kong.
“Anecdotal evidence suggests that U.S. allocators were probably the largest contributors to the start-up capital last year, though a new breed of Asian high net worth individuals and family offices also emerged as silent but serious backers of several new hedge funds.”
Singapore performed well in 2010, reporting the launch of 15 new funds with $673 million, up significantly from 2009. “The new regulatory regime being rolled out there has brought about a renewed confidence in the Lion City funds, and that is being reflected in the start-up space too,” says Dayal. Hong Kong remained the leader in the region, though, with 57 launches that attracted $2.4 billion in assets.
Redistribution of assets, resulting from the outflows from closures to new managers, as well portfolio rebalancing by investors within Asia, contributed significantly to the total new launch asset raising.
In terms of strategy, new China funds led the pack, as they did in 2009, attracted $817 million or 21% of total assets gathered by new funds. Multi-strategy funds, with $365 million; Japan-focused funds, with $317 million; and macro funds, with $208 million, also attracted considerable interest.
Dayal says 2011 holds promise, with several high-profile bank spin-offs and second-generation hedge fund launches in the offing. “Just like the class of 2009, the class of 2011 will be an interesting one to watch, with star prop traders such as Morgan Sze, Ben Fuchs and Charlie Chan expected to make their debuts,” she says.