Eurekahedge expects hedge funds pouring $20 billion into Asia in 2005

A A

Mumbai, Feb 7, Feb 08 2005, 00:00 IST

Tags:

Research and consultancy firm Eurekahedge Pte Ltd expects hedge funds to sink at least $20 billion more into Asia in 2005, increasing their total investment in the region by a third to $80 billion. The Singapore-based hedge fund specialist said growth in Asia would outstrip the industry’s estimated 20% annual global growth rate as these funds had a relatively small presence in the region’s fast-growing economies.

“This is probably a conservative estimate,” Eurekahedge chief operating officer Alexander Mearns said of the forecast increase this year. “It could go up to $85-90 billion.” Hedge fund investment in Asia rose to $60 billion last year from $40 billion in 2003. Mr Mearns said there were 100 new fund launches in 2004 and another 100 were likely in 2005. The firm’s hedge fund index, the ABN Amro Eurekahedge index, was up 9% in 2004 and Mr Mearns said there were several reasons to expect much faster growth in Asia.

Asia’s market capitalisation is about 15% of global market capitalisation, but its hedge fund share now is about 6% of the global industry, estimated at $1 trillion. “There is a discrepancy there. So it is only natural for Asia to catch up. Handbrakes were put on the industry after the monetary problems of the late 1990s, or growth would have been a lot quicker.”

He said a relative lack of transparency, even in the advanced Japanese market where there was little research on mid-sized companies, provided arbitrage opportunities. Fast-emerging economies such as China and India also provided

... contd.

Ads by Google

Single Page Format

1 | 2 | Next