Despite the fanfare accompanying the rise of billion-dollar Asian hedge funds, statistics for 2011 show that strategies managing $20 million or less account for 42% of the sector, up from 29% in 2007, according to figures from data provider Eurekahedge.
The figure, which is up slightly from 41% in August last year, is attributed to the growing number of funds that have fallen into the under-$20 million category due to heavy investor redemptions and performance-based losses.
It also reflects the fact that many new funds which launched in 2009 and 2010 had difficulty raising capital, keeping them in the smallest fund category, says Eurekahedge.
The number of Asian hedge funds managing more than $1 billion in assets stood at 1% as of last December, down from 2% in August 2011, likely falling out of the biggest category for the same reasons as their smallest peers: redemptions and performance losses.
In all, the Asian hedge fund industry had $124 billion in total AUM, managed by nearly 1,300 funds as of end-December.
Eurkeahedge figures also show that prime brokerage duopoly players Goldman Sachs and Morgan Stanley had corresponding market shares of 28.02% and 22.43% as of last December, slightly down from 28.41% and 24.38% in August last year.
Deutsche Bank moved up to third place with 13.01% (up from 8.87%), switching places with UBS which slipped to fourth with 11.51% (down from 13.24%). Rounding out the top five were Credit Suisse with 8.15%, which bumped Citi down a notch to sixth (6.36%).
The top five prime brokers held a collective 83% of the market, compared with 76.36% in 2007, with their gains coming at the expense of players outside of the top 10.
Eurkeahedge notes that in the post-crisis era, hedge funds have increasingly chosen larger, better-known and financially stable prime brokers.