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Asian Hedge Fund industry declines sharply

Date: Friday, November 14, 2008
Author: Xinhuanet.com

Assets invested in hedge funds focusing on Asia fell sharply in the third quarter of 2008, according to data released Thursday by Chicago-based Hedge Fund Research (HFR), a leading source of hedge fund information and performance data.

A combination of performance-based losses and investor withdrawals affected funds across all Asian regions and strategies, according to HFR.

Faced with nearly 10 billion U.S. dollars in performance-based losses for the quarter, investors withdrew more than 3.4 billion dollars, resulting in a 13 percent decline in the size of the Asian hedge fund industry, which fell from 100 billion dollars to 87 billion dollars in total assets.

The percentage decline in Asia-focused assets slightly exceeded those experienced by the global hedge fund industry for the quarter, which saw assets under management fall by 11 percent from1.93 trillion dollars to 1.72 trillion dollars. The total number of hedge funds investing in Asia also fell slightly, from 1,078 in 2nd quarter to 1,065 at the end of 3rd quarter.

"Losses in the third quarter of 2008 represent an incredible contrast to the third quarter of 2007, in which hedge funds investing in