Investment industry expects big inflows into Asian hedge funds in third quarter

As investors confidence is returning may experts think that Asian hedge funds will have more inflows in the third quarter. Both Western and Asian hedge funds suffered heavy redemptions since Lehman Brother's collapse in September and the largest scandals in investment industry elated to Madoff and others undermined the trust to the industry.

Still, the new figures show that the pace of withdrawals is easing and a number of industry players expect Asian hedge funds could see net inflows during the second half of 2009, judging by expressions of interest by potential investors and requests for research and due diligence.

According to Aureliano Gentilini, global head of hedge fund research at Lipper, a unit of Thomson Reuters, inflows to Asian funds will be helped by new asset allocation models adopted by Calpers and other U.S. pension funds that will shift more money to alternative investments.

Besides, the fact that the region will likely recover more quickly than the rest of the world also contributes to experts’ assurance that Asian hedge funds could see a faster turnaround in inflows than their U.S. and European counterparts.

"We are very positive on the outlook for new inflows into our funds since our strategy is performing well and the outlook for systematic fundamental equities long/short like ours is excellent at the moment," said Frank Holle, co-founder of the Singapore-based Quant Asset Management, a fund manager that uses computer models to invest.