Asian hedge funds have held their ground

by Martin Frenette

Investing in Asia has always been fraught with dangers but also opportunities. For anyone following the markets of late, it’s been impossible not to formulate an opinion on China: everything from the meltdown in the A share market, to the slowdown of the economy, to the potential bubble in credit and devaluation of the yuan has rocked the markets worldwide. That being said, it’s a vibrant region, full of industrious people and as the second economy in the world, it is now impossible to avoid. The main issue has been the volatility (compounded by the general underperformance of all things EM) and since it’s been very hard from Europe to time the market, the idea was to find a way to maintain an allocation to the area but through local talent that can help us navigate these markets. Having gone from crisis to crisis with deeper drawdowns than what we usually see in the West, it must be said that Asian hedge fund managers are used to dealing with this kind volatility and, of late, have done better than their counterparts elsewhere.

To this effect, we have worked with Arowana Asset Management in Hong Kong that run our Luxembourg based fund in the region. Not only have they been able to give us exposure to the risk adjusted returns we would expect from hedge funds in the region, they have also picked the right managers. In what was far from being a supportive market environment for investors in the past 5 years (the MSCI Asia was -1.14% and the HSCEI -24.35%), the fund registered a positive double digit performance with the third of the volatility of the market, confirming our belief that fund managers in Asia can add a lot of value to investors.

Past performance is not indicative of future results. This article does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation.





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