2012 Key Trends in Asian Hedge Funds

September 2012

Introduction Asian hedge funds have witnessed tough times since 2008 and have faced numerous challenges over the last two to three years. The industry saw tremendous growth between 2000 and 2007, with the number of funds increasing eight-fold and total assets under management (AUM) growing by nearly 800%. By end-2007 the size of the Asian hedge fund industry stood at US$176 billion managed by 1200 managers. With the onset of the global financial crisis managers faced heavy losses, while also witnessing significant redemptions from investors. The Eurekahedge Asian Hedge Fund Index declined by 20.54% in 2008 and by April 2009 the AUM declined to US$104.8 billion. The industry bounced back after April 2009 with managers posting excellent performance-based returns and also attracting some asset flows. Despite this, growth post-financial crisis has been slow and yet to match what was seen in the industry in the years before 2008. Figure 1: Industry growth since 1999
1,400 1,200 200 180 160 120 100 600 400 200 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jul12 Number of funds AUM (US$ billion)


80 60 40 20 0

Source: Eurekahedge

The Eurekahedge Asian Hedge Fund Index gained 26.46% in 2009 and 8.58% in 2010. During this time managers also attracted some assets from investors to bring the size of the sector to US$128.6 billion by end-2010.

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September 2012 | 1

AUM (US$ billion)

Number of funds