Equity Strategies Dominate the Asia-Pacific Hedge Fund Landscape - February 2016

by Benedict Pang

  • 05 Feb 2016
  • HF

The Asia-Pacific region continues to develop as a centre for hedge fund management. Preqin’s Hedge Fund Analyst module on Hedge Fund Online tracks over 700 Asia-Pacific-based hedge fund managers, collectively holding $179bn in assets under management (AUM) as of June 2015, up from $145bn at the end of 2014.

Hong Kong is home to the largest proportion (44%) of Asia-Pacific-based hedge fund managers, more than double the proportion of firms based in Singapore (21%) and four times more than the 77 firms based in Australia. In terms of fund focus, three-quarters of Asia-Pacific-based hedge fund managers will focus on investments in Asia, with 30% adopting a global approach and 20% specifically targeting investment in Greater China.

As can be seen in the chart above, hedge fund managers within Asia-Pacific will predominantly utilize equity strategies – significantly more than the proportion of firms targeting all other top-level strategies. Australia-based Platinum Asset Management is the largest hedge fund manager in the region, with AUD 27.6bn in AUM, and specializes in investing in international equities, managing a multitude of funds focused on long/short equity and long bias strategies.

One possible reason for the emphasis on equity strategies by Asia-Pacific-based managers could be due to the opening of some equity markets in the region over recent years creating opportunities for investors. While volatility in Asian markets during H2 2015 may have reduced gains this year, Asia-Pacific-focused equity strategies funds returned 7.76% over 2015, comparing favourably to the 8.35% returned by Europe-focused funds, and vastly outperforming North America-focused equity strategies funds (+0.10%). If this performance is maintained, we can expect to see the Asia-Pacific hedge fund industry continue to grow in future.

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