Market Outlook 2021 Asia is in focus for hedge funds
Asia has been a standout theme for UBS Hedge Fund Solutions and they have doubled their allocation to Asia equity hedge fund managers over the last five years. Adolfo Oliete, Head of APAC Investments explains why.
Asia has been one of the standout thematics in our team’s allocations and we have more than doubled our allocation to Asia equity hedged funds over the last five years.
3 reasons why Asia is a standout theme for hedge funds
3 reasons why Asia is a standout theme for hedge funds
1. Higher alpha generation in Asia
1. Higher alpha generation in Asia
The shift to Asia has happened because of higher alpha generation in the region, due to secular growth opportunities, structural market changes, and limited hedge fund capital in highly liquid markets.
2. China’s inefficient equity markets offer more alpha opportunities for long and short investors
2. China’s inefficient equity markets offer more alpha opportunities for long and short investors
China's large equity universe is under-researched by the sell side and has historically experienced higher dispersion, offering more alpha opportunities for long and short investors.
3. China’s equity market has low foreign and hedge fund capital participation
3. China’s equity market has low foreign and hedge fund capital participation
A shares have very little foreign ownership (8.9%) and that plays well for hedge funds.
That’s because hedge funds are very active and can take advantage of the high turnover in China for opportunities both on the long and short side.
The turnover in China’s equity market is almost two-and-a-half times than the US.
Adolfo Oliete
Adolfo Oliete
Head of Asia-Pacific Investments, UBS Hedge Fund Solutions
Adolfo is primarily responsible for spearheading investment research in the region. He is a member of the UBS Asset Management APAC Committee and the Management Committee.
Adolfo leads research on markets, hedge fund investment due diligence and co-investments in Asia. He has a senior management role in Asia and represents the region in portfolio management meetings.
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