Hedge Funds in Asia Worst Hit by Redemptions, eVestment Says

  • Asia-based funds have lost about 10% of assets this year
  • Regional redemption pressures heaviest since mid-2011

Asia-based hedge funds are facing the worst redemption pressures in five years, with investor withdrawals cutting regional industry assets by about 10 percent in the first half, according to eVestment.

Asian managers suffered $6.3 billion of capital outflows in the six months, making them the worst hit among global peers this year, the Atlanta, Georgia-based data provider said in a July 26 report that estimated regional industry assets at $54.9 billion. Asia has seen net redemptions for seven consecutive months through June, or nine out of the last 10 months, according to the report.

Investor disappointment with the hedge fund industry is mounting globally as many managers haven’t been able to beat benchmarks amid market shocks from Britain to Beijing. Political events and government stimulus have amplified market volatility, giving the global industry the worst first quarter since 2008, according to an index compiled by Chicago-based Hedge Fund Research Inc.

The Eurekahedge Asian Hedge Fund Index retreated 2.5 percent in the first six months of 2016, trailing the 1.1 percent advance of the global industry gauge of the Singapore-based data provider.

Redemptions were the heaviest from Asia-based funds that lost money last year, according to eVestment data. Last year’s losers with less than $1 billion of assets collectively reported nearly $2.2 billion of outflows in the first half, while redemptions from larger peers approached $2.3 billion.

Funds investing in China saw $126.5 million of capital outflows in June, less than the pace in May, eVestment said.

"While it appears the heavist redemption pressures may have passed, investor sentiment continues to be negative,” it said of China funds.

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