According to speakers at AsianInvestor and FinanceAsia's global recovery investing summit last week, titled 'Maximising opportunities in distressed and troubled assets', Asian distressed is struggling to attract as much money as its brethren in other parts of the world.

"The US is at the forefront of allocating to distressed strategies," says Marlin Naidoo, award-winning prime broker and head of hedge fund capital group for Asia-Pacific at Deutsche Bank. "But their money is mainly going to US distressed managers. Over here, Asian investors have spent less time looking at Asian distressed managers."

In Asia, investors want liquid strategies. Japanese investors in particular are credited with being fixated on the short-term time horizon.

"We had a pot of capital destined for distressed strategies from European investors," says Doug Coulter, Asia-Pacific head of private equity for LGT Capital Partners. "However, that got deployed in Europe and America. Our investors are more interested in the growth story of emerging Asia instead of the distressed themes here."

Richard Johnston, managing director of Albourne Partners, adds a caveat to that observation. "People trying to get into that Asian growth story often get it wrong though," he says. "It can be better to talk to the cynics than those who drink the China 'Kool-Aid' story." (He is referring to the 1978 Jonestown massacre of cult members with a poison-spiked drink.)

Johnston also said that allocations to distressed strategies have materialised more recently from some sovereign wealth funds (he wouldn't say which ones) and from pension funds -- as opposed to endowments, who were over-invested during the crisis and have held back.

"In the US, recent distressed investments have partaken of bridge finance of collateralised lending," says Fred Ingham, Asia head of hedge fund investments at Neuberger Berman. "In Asia though, investors have an implicit beta assumption factored into their Asia investment decisions."

Perhaps, then, a case of 'beta the devil you know'.