Bloomberg News

Asian New Hedge Funds Raised $2.86 Billion in First Half

July 19, 2011

(Updates with quote from the survey in fourth paragraph, Eurekahedge Fund Index in final paragraph.)

July 20 (Bloomberg) -- Twenty-four new hedge funds in Asia raised $2.86 billion in the first half of 2011, more than double the preceding six months as the average startup size surged, an AsiaHedge New Funds Survey showed.

The amount raised compares with $1.09 billion in the second half of 2010 and 70 new funds that started in the first half of last year, AsiaHedge said in an e-mailed survey dated yesterday. The average new hedge fund size jumped to $119 million in 2011 compared with about $40 million in the first half of last year, while multi-strategy funds attracted the most money for the first time, luring $1.9 billion, it said.

Assets raised by new funds is Asia climbed to the highest since the peak of $5.7 billion raised in the first half of 2007. The Eurekahedge Asian Hedge Fund Index, which tracks more than 450 funds, has lost 0.3 percent in the first six months of 2011, underperforming the 0.4 percent return by the global benchmark.

“The Asian new fund landscape continues to be reinvigorated, though the barriers of entry are the highest ever, resulting in only a handful of high-quality new managers being able to come to the market,” Aradhna Dayal, editor of AsiaHedge in Hong Kong said in the statement. “These managers have to display a combination of solid pedigree, experience in managing a sizable chunk of assets and institutionalized platforms.”

There is a “healthy pipeline” of new funds in Asia in the second half of 2011, the survey said. Among the biggest hedge- funds that started this year is Azentus Capital Management Ltd., a Hong Kong-based hedge fund led by former Goldman Sachs Group Inc. proprietary trader Morgan Sze.

Benjamin Fuchs, who leads the Global Opportunities Group proprietary trading desk at Nomura Holdings Inc., aims to start his own Hong Kong-based hedge fund with at least $400 million, said two people with knowledge of the plan.

Net asset flows for first half of 2011 stood at $116.2 billion globally, the strongest first six months on record, a separate report by Singapore-based Eurekahedge Pte showed. In June, the Eurekahedge Hedge Fund Index declined 1.2 percent, the second-straight drop, amid concerns about the U.S. economy and the European sovereign debt crisis, Eurekahedge said.

--Editors: Malcolm Scott, Linus Chua

To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


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