Singapore-based consultancy firm GFIA Pte Ltd., released its latest research paper on the trend of Asian hedge fund launches, including a review of the different strategies utilized by asset managers in the past several years.

According to GFIA, it noted that the number of hedge fund launches in Asia declined in the last two years, including the size of new funds shrunk compared with the pre-financial crisis level.

However, the specialist in skill-based managers in Asian and emerging markets said that despite the difficulties and the challenges facing the Asian hedge funds industry, the sector is still progressing at a healthy rate, despite the fact that the launches are getting smaller.

The most currently relevant findings are:

  • It is increasingly difficult for new and smaller funds to raise assets. As of end-March

2010, 70% of the funds launched in 2008 and 2009 are still US$50m or less.

  • Managers are launching smaller funds. The average fund launch size in 2009 had

decreased to US$40m at launch, half the figure for 2007.

Peter Douglas CAIA, principal of GFIA, commented: "The key issue for the majority of hedge funds in Asia is the current difficulty in raising assets. There's no shortage of great managers and underexploited opportunities - the constraint is finding allocators with the experience, mandate, or confidence to allocate to skill-based managers in Asia."