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Asia-Pacific hedge funds strongest performers
12 September 2013
Region returns over 18% in 12 months to July, finds Preqin
Hedge fund analysts Preqin have found Asia-Pacific funds performed the best in the 12 months to the end of July 2013, with net returns of 18.61%.
The firm said this compared to returns of 15.38% and 11.97% from North America and Europe-focused funds respectively, over the same period.
Preqin also found strong investor appetite for Asia-Pacific funds, with over two fifths (41%) of hedge fund investors based in the region looking to increase allocations in the next 12 months.
Over half (53%) of investors outside the region are also looking to increase Asia-Pacific hedge fund allocations in the next 12 months. The overwhelming majority (81%) of Asia-Pacific-based investors said that their fund investments had met or beaten their expectations.
Amy Bensted, head of hedge fund products, Preqin, said: “This is a significant period for the hedge fund industry in the region. New developments, particularly 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.
“Strong performance by Asia-Pacific-focused funds over the past 12 months has contributed to an increase in appetite for the region among investors based in Asia-Pacific and globally. This impressive performance could enable the Asia-Pacific hedge fund industry to grow to record levels in the coming years.”
Preqin's research also found Asia-Pacific hedge funds outperformed overall benchmarks over the year to date at the end of July, with a net return of 6.91% - nearly three times higher than the average 2.4% return of firms elsewhere in the region. Asia-Pacific funds also returned more than the benchmark on an annualised basis over the past two, three and five years.
For the 12 months ending 31 July 2013, long/short funds produced a return of 22.06%, well above the benchmark of 12.55%.
However, Preqin noted that despite strong performance, Asia-Pacific-focused hedge funds displayed a higher volatility than the global average, with a five-year volatility of 12.55% Asia-Pacific-focused long/short funds as of 31 July 2013, against 10.63% for all long/short funds, 11.24% for North America-focused long/short funds and 6.66% for Europe-focused long/short funds.