HONG KONG (Reuters) - Assets raised by new hedge funds in Asia surged nearly 50 percent to $3.84 billion in 2010 from a year earlier, yet another sign that investor interest in regional funds has been on the mend since a tough 2008.
The number of fund launches increased to 95 last year from 78 in 2009 while the average launch size rose to $40 million from $33 million, according to a survey by AsiaHedge.
"Despite a slightly lacklustre second half, new Asian hedge fund launches continued to see sustained interest," said AsiaHedge editor Aradhna Dayal in Hong Kong. "Anecdotal evidence suggests that U.S. allocators were probably the largest contributors to start-up capital last year."
She added that most of the assets went to either second-generation managers with a strong pedigree or offerings from established hedge funds, given the rising entry barrier since the financial crisis wiped out trillions of dollars in investor wealth.
Some of the biggest launches were Gaoling Natural Resources Fund ($250 million) from Hillhouse Capital, Hareion Fund ($220 million) from Areion Asset Management and Sertorius Global Opportunities Fund ($200 million) from CSAM Asset Management.
While Hong Kong, with 57 launches and $2.4 billion in collections, maintained its lead as the preferred destination for hedge funds, Singapore improved in the second half ending the year with 15 launches and collections worth $673 million.
Strategy wise, new hedge funds chasing China were most in demand, attracting $817 million.
Hedge funds, including large American hedge funds, are making a beeline for Asia as more institutional investors aim to boost exposure to the fast-growing region in search for higher yield with 2011 expected to be another good year for new fund launches.
"Just like the class of 2009, the class of 2011 will be an interesting one to watch, with star prop traders such as Morgan Sze, Ben Fuchs and Charlie Chan expected to make their debuts," Dayal added.
NEWS - Investments in BRIC & Frontier Markets - NEWS
