Key Trends in Asian Hedge Funds (July 2021)

The Eurekahedge Asian Hedge Fund Index was up 6.63% year-to-date as of May 2021, supported by the strong performance of the underlying equity market as represented by the MSCI Asia Pacific IMI, which gained 7.10% over the same period. Driven by the encouraging progress on vaccine roll-out in some areas in Asia, accommodative government policies and normalisation of economic activity, the equity market in the region continued to strengthen over the year. Hang Seng gained 7.05% over the first five months of 2021, while TOPIX posted 6.56% over the same period. Over in India, despite the recent surge of new COVID-19 cases which overwhelmed their healthcare sector, the economic growth outlook in the region remained strong which contributed to the strong performance of the equity market in the region. NIFTY 50 was up 6.50% in May, pushing its 2021 year-to-date return to 11.45%.

Figure 1: Industry growth since 1999

Figure 1 provides the industry growth of Asian hedge funds since 2000. As of the end of May 2021, the total assets managed by Asian hedge funds stood at US$216.0 billion, while the industry population stood at 1,451 hedge funds. The number of hedge funds in the region has mostly stagnated between 2014 and 2021, even though the industry assets have grown by US$55.4 billion during the period. We can also observe that the Asian hedge fund industry was hit particularly hard by the 2008 financial crisis and it was not until the end of 2017 that the industry managed to recover the lost assets and surpass the previous industry AUM peak attained at the end of 2007. Supported by the strong market performances in the recent period, the Asian hedge fund industry have managed to recover from the COVID-19 crisis and recorded an all-time high on its asset under management on the fifth month of 2021.

The full article is available in The Eurekahedge Report accessible to paying subscribers only.

Subscribers may continue to login as usual to download the full report and non-subscribers may email to enquire on how to obtain the full research report.