U.S. hedge funds, which were all but eradicated from many Asian regions after they were blamed for the continents financial crisis of the 1990s, are returning in places like Hong Kong and Singapore, adding another chapter to what has been a sometimes tumultuous, sometimes spectacular, but never dull relationship, The Wall Street Journal reports.
The $9.4-billion Tudor Investment Corp. now employs two Singapore-based find managers, who just a year ago founded their own hedge fund, Pagoda Advisors. FrontPoint Partners has lured managers from the Asian-centered Sofaer Capital International and is scheduled to soon open an office in Hong Kong. A similar move is being made by New York-based Rohatyn Group.
Financial industry experts see the latest move by hedge funds as a potential quick-grower for the Asian markets. Some, though, are concerned with what another heavy move into Asia by the hedge funds will do to the Asian economy.
Since less research is conducted on them, Asian securities sometimes sell below their actual value, a huge advantage for hedge funds and other investors that use arbitrage.
"If you're a big hedge fund getting paid to beat the market, you'll probably find more possibilities in Asia," said Peter Douglas, head of Singapore hedge fund consultant GFIA Ltd,