Asia's hedge funds suffer highest withdrawals in 4 years in October

A man walks in front of an electronics stock display in Tokyo.
A man walks in front of an electronics stock display in Tokyo. PHOTO: AFP

SINGAPORE (BLOOMBERG) - Asia's hedge funds had the highest investor withdrawals last month (October) in more than four years as the industry is struggling with lacklustre returns.

Hedge funds investing in Asia excluding Japan suffered net outflows of US$2.1 billion (S$2.97 billion), or 1.3 per cent of total assets, according to data provider Eurekahedge Pte. That compares with withdrawals of US$3.6 billion in Europe, representing 0.7 per cent of assets, and US$2.5 billion in North America, or 0.2 per cent, the data show.

The global hedge fund industry has faced an investor backlash this year amid subpar returns and high fees. Investors allocating to Asia are particularly cautious as the industry is younger than in Europe and the US and funds investing in Chinese equities, in particular, suffered heavy losses at the beginning of the year.

China-focused strategies, which tumbled 8.9 per cent in January, have recovered some of their losses though are down 1.8 per cent for the year, according to Eurekahedge.

Hedge funds investing in Asia returned 1.4 per cent this year through the end of October, beating rivals in Europe while trailing the 4.7 per cent average gain of hedge funds in North America.