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Institutional Investors Need Asia Assets

Last Monday I met Matthias F. Knab, Managing Director of Opalesque Ltd, a Cyprus-based alternative investment publication. We talked about the trend in global hedge fund industry. It is obviously more and more international money managers would like to explore opportunities in this mainland.

 

In the past years, institutional Investors tend to be most active in placing their money in Asian hedge funds because of the wonderful return numbers. According to Merrill Lynch’s Dan McNicholas, a number of funds of hedge funds are planning offices in Hong Kong recently. The MSCI Asia Pacific Ex-Japan Index advancing 68% last year, beating the Standard & Poor’s 500 Index’s 23% gain. That is why we need to allocate our part of assets in this region.

 

Let’s check the returns in 2009 by various regional hedge fund strategies in Asia:

 

Strategies

Return in 09'

Sharpe Ratio

Asia ex Japan

37.42%

1.00

Asia inc Japan

32.70%

0.90

Greater China

45.27%

1.25

India

50.82%

0.18

Japan

6.64%

0.19

Korea

10.35%

0.44

Taiwan

95.43%

0.12

Source: Eurekahedge

 

 

As Asia, especially India and China had become drivers for the recovery of global economy, it seems you shouldn’t pass by the exciting growth story just because of caution on bubbles.

 

Now family offices and high net worth individuals are running historically high cash levels and will need to invest the capital. I think they could use funds of funds to spread their money across a variety of holdings, not just private equity funds in China, but also hedge funds.



Disclosure: No positions