Paul Smith moved from London to Hong Kong to work in Asia’s hedge-fund industry almost 17 years ago, and he rode the boom to its peak. Last year, like other industry veterans, he quit.
'I decided not to wait the cycle out but to do something more productive with my time', said Smith, 53, who remains in the city heading the Asia-Pacific office of the nonprofit CFA Institute, the global association of chartered financial analysts. 'The hedge-fund industry in Asia will continue to struggle to raise funds for the next few years as banks continue to have liquidity issues'.
Bloomberg reports that hedge-fund managers, traders and analysts in Asia are quitting as assets have failed to recover after the 2008 global financial crisis, and trading losses have left a majority of funds unable to collect performance fees. They’re moving to mutual funds, endowments, consulting firms and companies outside of the money-management business, often at a cut in pay.
Asian hedge-fund assets are 28% below their 2007 peak, according to data provider Eurekahedge Pte. Globally, money overseen by the funds increased 21% since 2007 to a new high of $2.3 trillion as of December, data from Chicago- based Hedge Fund Research Inc. show.
A total of 296 Asian hedge funds liquidated in the two years to December, 33 more than the number that started. On a global basis, 1,839 new funds outnumber those that shut by 371, according to Eurekahedge.
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