However, a few large hedge fund launches such as Azentus ($1 billion) and Myriad ($300 million) contributed significantly to the result and masked the difficulty for smaller new Asian hedge funds to raise capital.

Hedge fund strategies managing $20 million or less now account for 42 percent of the Asian hedge fund industry, compared to 29 percent in 2007, according to Eurekahedge.

Meanwhile, Hong Kong-based Triple A, (a joint venture partner with Triple A Partners Australia) will shortly exit the hedge fund seeding business, according to AsianInvestor.  The decision was based on a lack of investor appetite.  However, the firm will start a new venture with AGS Capital Partners to advise family offices.

The poor performance has resulted in investors redeeming monies and slower new fund raisings.  In China, ‘hedge funds’ are privately managed funds that are ‘basically long-only equity funds run by fund managers with cowboy pretensions,’ noted Asian Investor.

Most hedge-funds clients in China are HNWIs with ‘unrealistic’ expectations. ‘They have no long-term vision, and encourage or, more precisely, pressure fund managers to adopt aggressive approaches,’ said the report.

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There has been ‘a lot of growth in separately managed accounts [and] single-investor type funds’ in Asia, according to Adam Wallace, head of hedge fund services, Asia-Pacific, for JP Morgan Worldwide Securities Services, speaking to Asian Investor.

The required threshold for establishing a segregated account with an Asian hedge fund manager has dropped to $10 million from $100 million previously, due to increased client demand and improved automation in running segregated accounts.

• Asian hedge fund assets fell 5 percent in the first half to $145 billion, but is up 5 percent from a year ago.
• $109 billion was managed from within Asia, while $39 billion was managed from outside the region but into Asian markets.
• The Asia ex-Japan equity hedge fund strategy was the largest fund category with $28 billion in assets.