Asian hedge fund sector reaches $120 bn in April, driven by Chinese equities
The Asian hedge fund industry grew to a record in terms of capital invested last month as Chinese stocks soared, likely heralding the ‘beginning of a capital growth cycle’ that will spur further growth in Asian hedge funds, according to industry analysis firm Hedge Fund Research (HFR).
Total capital invested in the Asian hedge fund industry grew to $120 bn in April from $114 bn around the same time last year, HFR says in a press release. The number of hedge funds in the Asian sector, meanwhile, increased to nearly 1,200.
Despite the increase, the Asian hedge fund industry accounts for only a fraction of the $2.95 tn invested in the hedge fund industry globally. HFR says Asian hedge funds are likely to experience a period of rapid growth as their recent gains, spurred by rising Chinese stocks, attract the interest of more investors in Asia and abroad.
‘As exciting as the environment has been, it is likely the Asian hedge fund industry is only now at the beginning of a capital growth cycle, as global investors position for continuation and extension of these gains, while seeking to use sophisticated strategies to protect their portfolios from the volatility inherent in these markets,’ says Ken Heinz, president of HFR.
Inflows into Asian hedge funds totaled $1.1 bn in April, marking the 10th straight quarter of inflows, as investment in Asia-wide funds and those focused on emerging markets in the region more than made up for outflows from funds focused on Japan, HFR says.
Hedge fund capital invested in emerging markets in Asia totaled $53 bn in April while capital invested in pan-Asian hedge fund strategies reached $39 bn. Capital invested in Japan fell to $29 bn, HFR says. In the first four months of the year, the HFRI EM: Asia ex-Japan Index increased 14.5 percent while the HFRI China Index rose 18.8 percent.
