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The Continued Growth of the Asia-Pacific Fund of Hedge Funds Industry – October 2014

by Ben Pearson

  • 20 Oct 2014
  • HF

Preqin’s Hedge Fund Analyst tracks 66 fund of hedge funds managers based in the Asia-Pacific region, with reported aggregate assets under management of $23.9bn. This represents a steady increase on December 2013’s figures, when only 57 managers in the region managed a total of $20bn in assets. According to Preqin data, Asia-Pacific based firms represent approximately 9% of all fund of hedge funds managers globally and account for less than 3% of the total fund of hedge funds industry capital. On average, funds of hedge funds in the Asia-Pacific region were established in 2007, later than their North American and European counterparts who typically were established in 2005 in these regions. Nevertheless, despite funds of hedge funds making an appearance in the region at a later date, Preqin data estimates that there is now a real level of activity experienced by fund of hedge funds managers in the fledgling Asia-Pacific market.

So far this year, the number of fund of hedge fund launches in Asia-Pacific has more than doubled since 2013. This increase in the total number of Asia-Pacific funds of hedge funds is good news for many global institutional investors where a proportion have expressed an interest in the increasing number of funds of hedge funds launching and operating in the region. Preqin’s Hedge Fund Investor Profiles reveals that there are currently 423 institutional investors (excluding fund of hedge funds managers) that have reported to have an appetite for commingled and managed account fund of hedge funds vehicles investing across Asia-Pacific.

The past 12 months has seen an increase in the activity of fund of hedge funds managers across the Asia-Pacific market. A rise in the proportion of funds of hedge funds launched this year has contributed to the industry’s aggregate assets under management, and is further driven by investors with a preference for this type of fund vehicle in the Asia-Pacific region. All these factors combined indicate that this market is growing, leaving Asia-Pacific-based fund of hedge funds managers in a unique position to capitalize on the numerous investment opportunities available in a burgeoning market.

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