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Asia hedge fund start-ups see record first half

[HONG KONG] Asian hedge fund startups have had a bumper six months, raising a record US$5.3 billion in the first half of 2015, twice as much as in the same period last year, according to a survey.

The amount raised in the first six months was roughly equivalent to the total sum raised in all of 2014, according to industry survey, highlighting the structural changes in the financial industry as more traders and bankers leave traditional financial institutions to set up their own shops.

"This is what makes 2015 so remarkable, and let's not forget, we still have several multi-hundred dollar launches by star managers slated for the second half," said Aradhna Dayal, head of Asia for HedgeFund Intelligence which runs AsiaHedge.

The spurt in startups has been fuelled by anchor investors and strategic backers which has helped these funds to lock away long-term capital.

Overall, 25 new Asia-focused hedge funds were seeded, including the spinout of Graticule Asset Management from Fortress as well as a raft of new entrants, the survey said.

Despite the impressive headline capital raising numbers, hedge fund managers in Hong Kong were cautious about the overall capital raising environment and volatile markets, making long term calls a difficult task.

"If you are below a particular assets-under-management size, many institutional money managers typically ignore you even though it makes you faster and nimbler than the established guys," said the chief investment officer of a a Asia-focused hedge fund.

Choppy market conditions have also made it difficult for many hedge funds to beat market indexes consistently, with the recent slump and spike in volatility in Chinese markets tipping many hedge funds into the red this year.

A broad Credit Suisse hedge fund index has returned about 2 per cent in the first six months of the year. An MSCI index of Asian stocks ex-Japan is down nearly 3 per cent so far this year.

Macro strategy focused funds stole a march over other hedge fund strategy launches, garnering US$4.2 billion, according to the survey.