How Big Is That Asian Hedge Fund Industry In The Window?
"If you see a bandwagon, it's too late."
Sir James Goldsmith
founder of industrial, commercial and financial enterprises
Asia's hedge fund industry has been growing and growing fast. Assets are piling in like there is no tomorrow with India and China attracting attention together with Japan, South Korea and Australia.
Today, one can estimate that Asia's hedge fund industry stands at roughly US$215 billion or 16% of total global hedge fund capital. If you add in global managers who adopt an opportunistic approach to investing then Asian hedge fund capital might easily account for 20% of industry capital!
Interestingly, Japan would account for just over 40% of Asian hedge fund capital, compared to about 77% of Asian hedge fund capital in 2003. So, the "importance" of Japan is clearly falling in this bigger picture.
If you look instead at the narrow and restrictive universe of Asian hedge funds (like most commerical databases) then Asia's industry size is approx. US$130 billion or only 10% of global hedge fund capital.
If Asia's hedge fund industry retains it phenomenal growth rate then bottlenecks are likely to become more apparent.
Everyone from managers to investors to service providers will be impacted. Here are just a few of the ways in which the Asian hedge fund industry will have to adapt and change: serious prime broker challengers in the region (and not just MS or GS) will need to offer truely multi-currency products and services; exchanges will need to provide greater access to derivative products and across different time-zones (which suggests further mergers and JVs); there will inevitably be increasing competition among centers to attract new and emerging managers; investors will need to be educated about the returns and risks to be associated with the growing array of financial products and strategies; and, the authorities will need to look into various issues of regulation and supervision (probably on the manager side) as hedge funds head towards the mass retail marketplace.
All in all, the Window is getting bigger every day. Competition is going to stiffen. Mahalo.
"If you see a bandwagon, it's too late."
Sir James Goldsmith
founder of industrial, commercial and financial enterprises
Asia's hedge fund industry has been growing and growing fast. Assets are piling in like there is no tomorrow with India and China attracting attention together with Japan, South Korea and Australia.
Today, one can estimate that Asia's hedge fund industry stands at roughly US$215 billion or 16% of total global hedge fund capital. If you add in global managers who adopt an opportunistic approach to investing then Asian hedge fund capital might easily account for 20% of industry capital!
Interestingly, Japan would account for just over 40% of Asian hedge fund capital, compared to about 77% of Asian hedge fund capital in 2003. So, the "importance" of Japan is clearly falling in this bigger picture.
If you look instead at the narrow and restrictive universe of Asian hedge funds (like most commerical databases) then Asia's industry size is approx. US$130 billion or only 10% of global hedge fund capital.
If Asia's hedge fund industry retains it phenomenal growth rate then bottlenecks are likely to become more apparent.
Everyone from managers to investors to service providers will be impacted. Here are just a few of the ways in which the Asian hedge fund industry will have to adapt and change: serious prime broker challengers in the region (and not just MS or GS) will need to offer truely multi-currency products and services; exchanges will need to provide greater access to derivative products and across different time-zones (which suggests further mergers and JVs); there will inevitably be increasing competition among centers to attract new and emerging managers; investors will need to be educated about the returns and risks to be associated with the growing array of financial products and strategies; and, the authorities will need to look into various issues of regulation and supervision (probably on the manager side) as hedge funds head towards the mass retail marketplace.
All in all, the Window is getting bigger every day. Competition is going to stiffen. Mahalo.
posted by Franklin Scruggins | 9:54 AM
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