The region's long/short equity strategies had the highest market correlation, followed by event-driven and arbitrage, according to Eurkeahedge.
A more expensive and competitive operating environment means that even seasoned managers may face fund closure.
New funds will face a challenging fundraising environment in Asia, as will the prime brokerages and administrators who serve them, Eurekahedge predicts.
New launches fuel asset growth, but allocations fall below expectations, says Eurekahedge.
Strong returns and steady economic growth are proving a big draw for investors.