Asian hedge funds' 2024 performance best in 15 years

Full Truck Alliance

16/01/2025 09:45

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      Bets on China, AI, Japan drove regional hedge fund gains
    

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      Asia funds rose 12.1% last year, best annual figure since
2009
    

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      Keywise and First Beijing jumped 71% and 42% respectively 
    

  
    By Summer Zhen
       HONG KONG, Jan 16 (Reuters) - Asian hedge funds
delivered their strongest returns in 15 years last year,
capitalising on market volatility, winners in China's wobbly
economy and opportunities in artificial intelligence (AI).
    The HFRI Asia with Japan Index, which tracks hedge funds
that mainly invest in the region, rose 12.1% last year - its
best annual growth since 2009. HFR is one of the largest global
hedge fund data platforms. 
    2024 was a volatile year for most investors amid capital
flows from the region into stronger dollar assets, deflation
risks in China, and a massive unwind in yen-funded carry trades.
    While hedge funds navigated last year's turbulence,
investors expect trading in Asia to remain challenging in 2025
amid geopolitical uncertainty and Donald Trump's second U.S.
presidency.
    Many China-focused funds beat the benchmark China indexes by
picking the winners in the country's economic transformation,
sources within the funds and investors told Reuters.
    Hong Kong-based Keywise Capital, which manages $2 billion,
saw its flagship Mega Trend strategy rise 51% in 2024, thanks to
its bets on Gen Z consumption such as retailer Miniso  9896.HK 
and power supply companies such as China Yangtze Power
 600900.SS , which benefited from AI demand.
    Keywise's tech-focused Penguin development fund book a 71%
return. 
    Fang Zheng, chief investment officer of Keywise, said AI,
businesses that appeal to younger consumers, and clean energy
would be key sustainable trends and he expected "AI will address
human emotional intelligence (EQ) applications extensively in
2025."
    First Beijing, a China-focused hedge fund, gained 42% last
year, lifted by its stakes in Meituan  3690.HK , Atour Lifestyle
 ATAT.O  and Full Truck Alliance  YMM.N , according to a source
familiar with the performance. 
    Funds that seized the brief window of opportunity after
China announced its stimulus package in September had decent
returns, according to Timothy Moe, chief Asia Pacific regional
equity strategist at Goldman Sachs.
    "It's very clear that hedge funds have been very nimble and
quick to exploit the rallies in China," Moe said, noting that
such funds scaled up their positions in China on the back of the
stimulus rally, and reduced them when the market peaked in early
October.
    Fundamental long-short funds in Asia posted an average gain
of 14.1%, higher than their peers in the U.S. and Europe, which
were up 13.2% and 4.6% respectively, according to estimates by
Goldman Sachs prime brokerage.
        Asia-based multi strategy funds also had a good year
with Dymon Asia, Pinpoint and Ovata Capital delivering double
digit returns.  
    Singularity Tech Fund, run by Hong Kong's $1.3 billion
CloudAlpha Capital Management, jumped more than 70% last year,
with positions in semiconductors and datacentre infrastructure
generating profitable returns, according to the company.
    Panview Capital’s flagship pan-Asia fund jumped 41% in 2024
helped by its large bets in Japan, according to an investor
source.
    Panview and First Beijing did not respond to a Reuters
request for comments.
    Analysts say China remains a difficult market for global
allocators, regardless of last year's impressive returns.
    "We see more interest in either Asian multi-strategy funds
or Japanese funds as these are seen as operating in a more
predictable regulatory and political environment," said Patrick
Ghali, managing partner of Sussex Partners.
      
 Hedge funds performance:
 ASIA HEDGE FUNDS               STRATEGY          2024
                                                  PERFORMANCE
 *Keywise Mega Trend            Equity long only  51% 
 First Beijing                  Equity long only  42%
 *Yunqi Capital - Yunqi Path    Equity long       29% 
 Fund                           short             
 WT China Fund                  Equity long       34% 
                                short             
 Golden Pine                    Equity long       25%
                                short             
 Golden Nest                    Equity long       13%
                                short             
 PinPoint China Fund            Equity long       20%
                                short             
 Greenwoods Focused             Equity long       36%
 Opportunities Fund             short             
 *Keywise Penguin Development   Equity long only  72% 
 *CloudAlpha Tech Fund          Equity long       80% 
                                short             
 *CloudAlpha - Singularity      Equity long       72% 
 Tech Fund                      short             
 Panview                        Equity long       41%
                                short             
 Keystone                       Equity long       23%
                                short, low net    
 Dymon Asia                     Multistrategy     17% 
 PinPoint Multi Strategy        Multistrategy     12% 
 Ovata                          Multistrategy     13%
  Sources: Investors and funds
  *For Keywise, Yunqi and CloudAlpha, the performance refers to
gross returns

 (Reporting by Summer Zhen; Editing by Vidya Ranganathan and
Kate Mayberry)
 ((summer.zhen@thomsonreuters.com; 852-3462-7739;))