Asian hedge fund capital has fallen to its lowest level since Q3 2013 according to research by Hedge Fund Research (HFR).

After a volatile start to 2016, total Asian hedge fund capital declined to $111.9bn after investor outflows of $2.3bn, as worldwide hedge fund capital also contracted to $2.85trn.

The news comes despite a marked recovery in many Asian indices throughout March, which buoyed regional hedge fund performance, especially for those operating macro strategies.

The HFRI China Index, HFRI India Index, and the HFRI Asia ex-Japan Index all performed well last month, adding 6.1%, 11.8% and 6.9% respectively.

These gains represent the strongest monthly performance since 2012 for the India Index, and the highest since May 2009 for Asia ex-Japan.

The opportunity for returns is still present, as Asian macro-focused hedge funds saw a 3% return over the first quarter this year, double that of global macro hedge funds according to HFR’s Asian Hedge Fund Industry Report for the period.

Kenneth Heinz, president of HFR, said: “Surging Japanese Yen volatility has contributed to gains across Asian hedge funds, as many funds recovered from intra-quarter declines, despite continued weakness in Japanese equities, resulting from recent Yen strength.”