Photographer: SeongJoon Cho/Bloomberg

Asia’s Hedge Funds Suffer Highest Withdrawals in Four Years

  • Investors redeemed $2.1 billion, 1.3% of assets in the region
  • Hedge funds globally face investor backlash over low returns

Asia’s hedge funds had the highest investor withdrawals last month in more than four years as the industry is struggling with lackluster returns.

Hedge funds investing in Asia excluding Japan suffered net outflows of $2.1 billion, or 1.3 percent of total assets, according to data provider Eurekahedge Pte. That compares with withdrawals of $3.6 billion in Europe, representing 0.7 percent of assets, and $2.5 billion in North America, or 0.2 percent, the data show.

The global hedge fund industry has faced an investor backlash this year amid subpar returns and high fees. Investors allocating to Asia are particularly cautious as the industry is younger than in Europe and the U.S. and funds investing in Chinese equities, in particular, suffered heavy losses at the beginning of the year.

China-focused strategies, which tumbled 8.9 percent in January, have recovered some of their losses though are down 1.8 percent for the year, according to Eurekahedge. Hedge funds investing in Asia returned 1.4 percent this year through the end of October, beating rivals in Europe while trailing the 4.7 percent average gain of hedge funds in North America.

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