Hedge fund news website FINalternatives says 2014 was “a landmark year” for Asian hedge fund assets.
It reports that Asian Hedge Fund assets rose 21%, breaking their 2007 peak of $192 billion to surge to $193 billion.
According to Finalternatives, “The survey found China-focused strategies were the largest segment within the regional industry last year, commanding assets of $32.88 billion. Significantly, some 86%, or $167 billion, of the industry’s regional AUM is now being managed out of Asia itself, signaling growth in indigenous asset management capability. As much as $68 billion is being run from Hong Kong alone, the survey found.”
The stability of the yuan is helping relative returns and boosting inflows. In U.S. dollar terms, Chinese local equity shares are currently the world’s best performing major markets, with Shanghai A-shares +13.9%, nearly matched by the Nikkei’s continuing rally at 13.2% and lagging behind is the S&P 2.2%, Eurostoxx 6.4%, the FTSE 2.9%, and even India at a relatively modest 4.2%, and Brazil continues to plummet at -12.4% in dollar terms YTD (only Russia’s MICEX YTD matches Chinese local returns and capital continues to flee the country). With stretched valuations and diminishing growth expectations in the developed and developing West, expect further inflows from international money managers looking for outperformance.