By Summer Zhen
HONG KONG, April 27 (Reuters) - Asia hedge fund startups
raised only $3.5 billion last year - the lowest amount since the
global financial crisis, industry data showed, with activity in
Hong Kong hit hard by COVID restrictions and heightened
geopolitical risks.
While more launches in the region are expected this year,
demand for hedge funds will still be subdued, market
participants say.
"The money pool available to invest in hedge funds has
reduced dramatically since last year and we would need better
market conditions to see strong interests again," Tareck
Horchani, head of prime brokerage dealing at Maybank Securities
in Singapore, said.
Only 45 hedge funds launched in Asia (including Japan) last
year amid a broad market sell-off, far fewer than the 78 in
2021, according to hedge fund data platform With Intelligence.
The $3.5 billion raised was the lowest amount in 13 years.
The figures do not include yuan-denominated onshore China
funds.
Hong Kong had the biggest drop in launches, to 22 from 39,
while Singapore was steady at 11.
Singapore-based Keystone Investors, a spinoff from Schonfeld
Strategic Advisors, was the most notable launch in 2022. The
Greater China-focused equity long short fund raised $1 billion
after it began trading in April last year.
With Intelligence said that based on information as of
end March, it estimates that at least 25 Asia funds are in the
works to be launched this year.
Market participants note that China's decision to abandon
draconian COVID restrictions and re-open its economy has allowed
investors and fund managers to travel between mainland China and
Hong Kong again.
A number of China-based fund managers are also setting up
shop in Hong Kong for the first time to woo mainland investors
with U.S. dollar-based products.
Horchani said macro funds, which tend to trade currencies
and bonds off global macro-economic trends, continue to be the
driving force in this market. But he added that demand has
declined following the March shutdown of Graticule Asia macro
hedge fund, once one of the largest macro hedge funds in the
region.
The HFRI Asia ex-Japan Index which tracks hedge funds that
target more than 50% of their investments in Asia ex-Japan,
slumped 17.8% in 2022 but gained 2.9% in the first quarter.
(Reporting by Summer Zhen; Editing by Edwina Gibbs)
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