Asian hedge funds 'facing pain'

10 April 2008

The number of Asian hedge funds is likely to shrink significantly in the near future, industry experts told a conference today.

Chief investment officer at hedge fund manager Tribridge Investment Partners, Eugene Kim, said that many "marginal" players would be driven out of business in the current financial climate - due to their being unable to raise money on the markets.

"Investors are demanding more of managers in regards to operational infrastructure, compliance, risk management ... you have to have a critical mass of assets under management to be able to pay for all of that," he said.

"Marginal managers…are either going to have to merge or get bought out or shut down."

Ferenc Sanderson at fund information firm Lipper also predicted a shrinkage in the sector in Asia of around 15 per cent - a downwards trend which he claimed had already started.

"The bloodletting is in full swing," he commented.

The comments were made at the Reuters Hedge Funds and Private Equity Summit - which is taking place in Hong Kong this week.

According to the Eurekahedge Asian Hedge Fund Index, the sector has declined by 7.26 per cent so far in 2008, the Guardian reports.

This compares poorly to hedge fund indices in Europe and North America, which have dropped by 3.49 per cent and 1.53 per cent respectively.

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