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Asian Hedge-Fund Numbers Rise to a Record on Economy, Eurekahedge Reports

Date: Wednesday, September 22, 2010
Author: Tomoko Yamazaki, Bloomberg

The number of Asian hedge funds reached a record 1,278 as more managers opened firms to tap interest in the world’s fastest-growing economies, according to Eurekahedge Pte.

A total of 125 Asian hedge funds started in the first seven months of the year, helping the total number in the region exceed the previous high of 1,240 in 2007, the Singapore-based data provider said in a report.

Asian hedge funds lost an average 0.4 percent this year through August, after posting a 27 percent gain in 2009, the strongest annual return on record, according to Eurekahedge. The economies of China and India, the world’s most populous nations, will expand 10.5 percent and 9.4 percent this year respectively, the International Monetary Fund forecast in July.

More hedge funds are launching because of Asian economies’ “greater growth potential” as well as developments in the industry that have made it easier to set up funds in the region, Eurekahedge said.

Gains have been limited amid concerns that the sovereign debt crisis in Europe may hinder economic expansion in emerging nations, the report said. The Eurekahedge Hedge Fund Index, which tracks more than 2,500 funds worldwide, is up 1.7 percent through August, compared with a 7.5 percent decline by the MSCI World Index of shares.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.

To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net