APAC hedge fund launches continue to take a hit

Out of 118 hedge funds launched in Q3 2016, only 3% were launched in the APAC region.
By Paul Walsh
Hedge fund launches in Asia have dived this year owing to difficult economic conditions, according to Prequin research.

The Asia-Pacific (APAC) region accounted for only 3% of total hedge funds launched in Q3 2016, according to Prequin’s hedge fund report.

Out of 118 funds launched in the period, only 3% were launched in the APAC region, which is put down to unfavourable market conditions that has seen the region’s share in launches remaining at 3% over the past two quarters compared to the 12% share seen in Q3 2015.

In addition, the report also recorded a similar trend in the proportion of new hedge funds considering the APAC region as their preferred investment target.

Only 1% of the 118 funds tracked in Q3 are focusing on the region compared to 9% in Q2 2016.

Speaking to Global Custodian earlier this year, Marc de Kloe, managing director at Adamas Asset Management, a Hong Kong-based alternative asset manager, suggested that there are opportunities in Asia, but not to western funds who see it as an easy win.

“There are plentiful opportunities in APAC for funds-of-hedge funds despite the bearish sentiment more broadly,“ said de Kloe.

“As many APAC managers are struggling to raise assets, this gives funds of hedge funds great opportunities to seed or inject acceleration capital into talented early stage managers at attractive rates.”

Elsewhere, the report found North American fund launches represented 76% of hedge fund launches, while Europe based managers represented a fifth of funds launched.

Other findings from the report revealed that single manager hedge funds represent the vast majority of hedge fund launches in Q3 2016 rising to 86% compared to 71% in Q2 2016.

Equally, UCITS funds and funds of hedge funds have seen decreases in their number of launches with their share more than halving compared to Q2 2016.