The hedge fund industry in much of the world managed a solid recovery from the global financial crisis, with assets under management rising, but in Asia growth has stalled.
The difference is stark. In North America, hedge fund assets at the end of 2007, as the financial crisis was beginning, were about $1.19 trillion and after declining during the crisis, had risen to about $1.49 trillion by the end of August this year, according to data from Eurekahedge.
In Europe, the recovery was less dramatic, with assets rising from $464.3 billion at the end of 2007 to about $517 billion at the end of August, the data show.
But in Asia, including Japan, assets fell from $176 billion at 2007's end to $168.9 billion by the end of August - that's including $2.3 billion worth of performance-based growth and $5.3 billion worth of inflows, the data show. Asia contributes less than 8 percent to the global pool of assets under management.
Hedge fund managers see several reasons the region's hedge fund growth is lagging.
"The comparison between building a hedge fund in Asia and elsewhere is absolutely there's no difference," noted Nick Taylor, founder and chief investment officer at Hong Kong-based Senrigan Capital, at the Milken Institute's Asia Summit last month. "It's the ingredients you have to do it in the place you're doing it. In the U.S., there's an enormously deep bench of talent … That's less true in Europe and it's even less true in Asia." Senrigan declined to provide its assets under management.