Total capital invested in Asian hedge funds rose to a record high in the third quarter even as capital growth slowed due to macroeconomic uncertainty in the region, according to industry analysis firm Hedge Fund Research (HFR).
Capital invested in Asian hedge funds rose less than 1 percent, or by about $1 bn in the quarter, but still set a record high – the fourth straight quarterly record – of $117.4 bn, HFR says in a press release. Asian hedge fund capital rose by $5.1 bn in the first three quarters of the year.
Performance in the region was led by record gains among Indian hedge funds, with the HFRI Emerging Markets: India Index climbing 46 percent in the year through to the end of October, HFR says. The increase beats the previous record gain of 45.6 percent set in the first 10 months of 2009.
The HFRI Emerging Markets: China Index gained 2.9 percent in the first 10 months of the year while the HFRI Emerging Markets: Asia ex-Japan Index climbed 7.5 percent. The HFRI Japan Index gained only 1 percent in the first 10 months of the year, capped by a decline of 1.2 percent in October as the yen weakened to a seven-year low against the dollar and the Bank of Japan sharply stepped up its quantitative easing program.
‘Asian hedge fund industry growth slowed in the most recent quarter, as regional equity market performance improved despite the combination of increased economic uncertainty created by Japanese stimulus measures, the sharp fall in the value of the Japanese yen and mixed signs of moderating growth of the Chinese economy,’ says Kenneth Heinz, president of HFR, in a press release. ‘The risk profile in Asian economies is fundamentally higher at present.’
HFR also says the percentage of Asian hedge funds based in China, Australia and India increased in the first three quarters of this year compared with the same period last year. At the same time, the percentage of funds based in Japan, Singapore and other locations declined.
