March 21, 2014 / 8:10 AM / 5 years ago

Asia hedge funds add $20 bln in first growth in 3 yrs

HONG KONG, March 21 (Reuters) - Asia-focused hedge funds added $20 billion in assets in 2013, recording their first growth in three years and boosting the industry’s size to $158.8 billion, according to a survey from tracker AsiaHedge.

The industry still remains about $33 billion below its peak asset level hit in 2007, but the twice-a-year survey shows that investors are starting to return.

“This dispels the notion that Asian hedge funds have fallen off the radar for global allocators,” said Aradhna Dayal, head of Asia for HedgeFund Intelligence, which runs AsiaHedge.

“We have seen assets in some of the large, home-grown managers swell considerably last year,” she added.

A 13.6 percent median return in Asian hedge funds, strong gains by China and Japan-focused managers, and a $3.85 billion capital flow into new launches last year helped the turnaround.

In another sign of a maturing industry, the survey found that nearly 80 percent of the assets invested in Asia hedge funds were now being run from within the region, up from just 52 percent in 2000 and 71 percent in 2009.

Assets at distressed and special situation hedge funds doubled to $6.3 billion in 2013, while Japan-focused funds recorded a 35 percent increase in assets to $19 billion.

Assets at China and Greater China equity long/short funds rose to $20.8 billion, making it the largest fund category in Asia.

Reporting by Nishant Kumar; Editing by Matt Driskill

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