Asia ex-Japan hedge funds saw $1 billion in net outflows last month, according to the latest Eurekahedge report, with most of the capital flight stemming from performance-based losses.

Managers across all regions registered negative yields in May, but Asia ex-Japan funds were among the worst performers with a -3.9% loss. The region fell just behind Japan, which had the lowest returns, of about -4%.

The negative yield in Asia translated into $900 million in performance-based losses, and adds to an additional $100 million that was redeemed by investors in May. It reverses an equal amount of inflows from the previous month when $100 million was allocated to managers in the region.

The outflows leave the region with an estimated $110.9 billion in hedge fund assets as of end-May.

Redemptions in Asia are in line with a broader global trend. Investors have also been pulling money out of hedge funds in the US and Europe, which saw respective net outflows of $3.4 billion and $4.7 billion last month.

Regional investors have been reluctant to allocate capital given the economic slowdown in China and the US, says Eurekahedge. Those in Europe are becoming increasingly bearish given the EU’s sovereign debt issues.

The only market to buck the trend of investor redemptions was Japan, where managers gained $200 million in fresh allocations last month. It was largely split between a few medium-sized funds that had healthy Sharpe ratios – an indicator of risk-adjusted returns – in 2011.

It is likely that most of the redemptions in Asia were among the region’s smaller funds, says Richard Johnston, head of Asia at Albourne Partners, a consultancy firm which advises investors on hedge fund investments.

“The funds that rely heavily of fund-of-funds and family offices seem to have been hit quite hard by redemptions,” says Johnston.

Many of the larger hedge funds that are backed by institutional investors do not report their results to data firms, he notes. “We see assets holding up very well here and still some inflows.”

Commodity trading advisor (CTA) and event-driven funds were the only strategies in Asia to register a return in May, according to Eurekahedge. However, the gains were minimal, with CTAs up 0.43% and event-driven gaining 0.08%.

All other strategies in the region were in negative territory, with relative value being the worst performer. The strategy had an average loss of 6.85% last month, due to volatile market conditions and a sharp decline in stock values, says Eurekahedge.

Event-driven funds are Asia’s best-performing strategy in the year-to-May, with collective gains of 15.94%, which Eurekahedge attributes to robust M&A activity in China.