Hedge funds in Asia

Asia’s core attraction to global asset allocators is that there are some world class managers who typically still have capacity. Cyclically, renewed investment interest in Asia and resulting liquidity flows are rapidly increasing demand and to a certain extent, supply. The industry achieved critical mass in 2003 in terms of size, number of managers, and in particular the quality of start-ups. Allocating to a hedge fund manager is the result of a search for talent allied with capacity, and this is no different in Asia. But global allocators looking to managers in Asia will find some different characteristics, some driven by the youth of the industry, some by the nature of the underlying capital markets, and some cultural. This article provides an overview of the industry in Asia, primarily for the benefit of potential allocators. While I have tried to include hard data, reporting schedules and a very rapidly developing industry mean that the numbers will inevitably be out of date by the time you read this; qualitative comment is of far more commercial value. I have therefore tried to provide as much qualitative color to the picture as possible, and have emphasized the commercially useful over the statistically perfect wherever possible. Information is attributed wherever appropriate. Otherwise, opinions and observations are my own and not necessarily those of GFIA pte ltd.