Asian Hedge Funds Grow Thanks to ‘Good Governance’

January 17, 2012 James Heinsman Hedge Fund News

According to Andrew Gordon, head of alternative investment services at BNY Mellon, Asian hedge funds are growing as they work to attract institutional money. In fact, the average size of a fund launch in Asia last year was around $40 million, the same as Europe.

“Mid-sized funds did very well in Asia,” Gordon said. He added that the figures, however, are not one hundred percent accurate because of the success “of a small number of new, larger hedge funds in the region. Overall the number of funds in the medium to large category is definitely growing.”

Though launches in 2011 did not always live up to expectations, Gordon remains optimistic. “We also saw the continuation of the closure of small funds but we believe this remains a positive sign of vibrancy of the Asian hedge fund industry,” he said.

Still, the coming year is likely to be a difficult one for fundraising. He explained, “In Asia the threat of the continued withdrawal of big European banks will create opportunities but if these assets start to be sold in falling markets there could be a knock-on effect in Asia that would pose a danger to the growth we’ve been seeing in the Asian hedge fund industry.”

Gordon continued, stating that good governance is key for attracting money in an industry. “We have been watching the continued growth and success, particularly among mid-sized Asian hedge funds, throughout 2011 with interest. The defining characteristic of these funds has been an intense focus on good governance, especially around counterpart risk.”

Andrew Gordon, Asian Hedge Funds, BNY Mellon, Europe, Hedge Fund Industry,

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