Asia hedge fund capital hits lowest point since 2013

Asian hedge fund capital declined to its lowest level since Q3 2013 in the first quarter of this year, narrowing losses across all regions, according to data from Hedge Fund Research (HFR).

Overall Asian hedge fund capital declined to $111.9 billion while total hedge fund capital globally declined to $2.85 trillion.

In other regions, the HFRX Japan Index gained 3.1% in March, leaving it down 1.9% for the year though topping the Nikkei 225 as the JPY increases alongside the US dollar.

The HFRI China index also improved in March gaining 6.1% narrowing the 2016 decline to 5.9% while the HFRI Asia ex-Japan Index increased by 6.9%, its strongest monthly gain since May 2009.

“Surging JPY volatility has contributed to gains across Asian hedge funds, as many funds recovered from intra-quarter declines, despite continued weakness in Japanese equities, resulting from recent JPY strength,” said Kenneth J. Heinz, president of HFR.

“Persistently low or negative interest rates, competitive currency valuations and an uneven global recovery suggest the potential for continued dislocations, possibly positive or negative. Hedge funds positioned for this environment are likely to drive industry performance through mid-2016.”