Asia continues to lag other regions for integrating ESG principles with investing; better data and stronger regulatory requirements will help institutional investors, market observers say.
And while the industry did enjoy net inflows from investors in the second quarter, the gain is nearly half the $1 billion gain from the first quarter, suggesting that investor interest is flagging.
As absolute-return vehicles, hedge funds are failing the test this year. Those Asia ex-Japan-focused strategies tracked by HFR have in aggregate lost -15.86% year-to-date, while Japan-only strategies have lost -7.14%, and Asia including Japan strategies are down -8.29%.
They are in aggregate doing better than benchmark indices such as the S&P500 with dividends (-11.9%), JapanÆs Nikkei 225 (-12%), IndiaÆs Sensex (-33%) and Chinese equities (-45%). But investors arenÆt paying hedge-fund fees for relative performance.
Certain strategies are flourishing: arbitrage strategies have done well, enjoying asset growth of $730 million. Multi-strategy products have gained inflows of $720 million. And the niche area of fundamental growth-equity has surged by $1.19 billion.
But event-driven strategies have seen net assets tumble by $525 million, while general equity hedge strategies (which account for over 63% of AUM and 74% of the total number of Asia-focused funds) have lost over $600 million in capital. Market-neutral equity and fundamental-value strategies together suffered capital withdrawals of $1.1 billion.
One reason for the pain among Asia-focused players is the overweening role of equity long/short strategies, at a time when favoured sectors such as macro are thin on the ground, notes Kenneth Heinz, president of HFR.
Omicron may have put the bite into the property sector, but commercial property in Asia Pacific is defying the odds in a challenging sector, says a CBRE report.
Korea Teachers' Credit Union appoints new CIO; AIA Singapore hired ESG head from UOB; Ping An confirms appointment of Benjamin Deng as CIO; Australian Unity hires first head of responsible investment; AMP has new head of portfolio management for multi-assets, Robeco hires Asia fixed income head; Haitong makes three new appointments for institutional clients business; and more.
After two tenures, AsianInvestor's 2021 Standout CIO Jang Dong-hun looks back on the past six years at Korea's Poba with satisfaction.
Risks including property downturn and ongoing pandemic make for difficult investment decisions.