Asia-Pacific has been a growing region in the hedge fund industry in recent years as both investors and managers have realized the potential of this emerging region for alternative investments. However, the industry in the region has still yet to reach the share of wealth contributed by the wider economy in Asia-Pacific, meaning that there remains the potential for substantial growth in the future. Asia-Pacific-based firms represent approximately 13% of all hedge fund managers tracked by Preqin, but these firms represent less than 4% of total industry capital, largely due to the fact that funds within Asia-Pacific are both newer and smaller than those in the established regions of North America and Europe.
This is a significant period for the hedge fund industry in the Asia-Pacific region. New developments, in particular the advent of the new Securities Investment Funds Law in China, could lead to significant changes in the region and provide a boost to the hedge fund industry. Despite this, fund launch activity in the region appears to have slowed amid a challenging fundraising environment for hedge fund managers. However, hedge fund investment activity in the region seems to be in fairly good health, with encouraging performance recorded by Asia-Pacific funds over the past 12 months leading to investors within the region looking to increase their allocations to hedge funds over the next year. Investors from beyond the border of Asia-Pacific, which were previously wary of allocating to the region due to the increased volatility and relative lack of track record of funds, are also looking to make their first allocations to the region or to increase their existing exposure.
Electron Capital Partners' flagship Electron Global Fund returned 5.1% in the first quarter of 2021, outperforming its benchmark, the MSCI World Utilities Index by 5.2%. Q1 2021 hedge fund letters, conferences and more According to a copy of the fund's first-quarter letter to investors, the average net exposure during the quarter was 43.0%. At the Read More
In Preqin Special Report: Asia-Pacific Hedge Funds, we analyze the Asia-Pacific region in terms of investor appetite for hedge funds, current hedge fund manager activity and hedge fund performance. As part of the report, Preqin conducted detailed surveys with more than 70 leading hedge fund investment professionals in order to analyze attitudes towards hedge funds in the region. The report also utilizes information from Preqin’s Hedge Fund Online service, which tracks over 4,300 active investors in hedge funds and 20,000 hedge funds and share classes.
Asia Pacific hedge funds key findings
41% of Asia-Pacific-based investors plan to increase their allocations to hedge funds over the coming 12 months (page 5).
53% of non-Asia-Pacific-based investors plan to increase their allocations to Asia-Pacific hedge funds in the next 12 months (page 8).
56% of Asia-Pacific-based fund managers believe the hedge fund industry assets under management in the region will increase in the next 12 months (page 12).
18.61% is the net return (%) for Asia-Pacific-focused hedge funds, making it the best performing regional benchmark for the 12-month period ending 31 July (page 3).
81% of Asia-Pacific-based investors said that their hedge fund investments had met or exceeded expectations over the past 12 months (page 6).
22.06% is the net return (%) for Asia-Pacific long/short funds for the 12-month period ending 31 July, outperforming the overall long/short benchmark, which returned 12.55% (page 3).
Full report via Preqin