|Intense competition for capital, increasing market volatility and the capital flight to the “safety” of larger hedge funds, has led to the closing of several Asia-focused hedge fund startups. According to a Bloomberg News report, many of the struggling hedge fund managers are finding refuge with the larger, more established hedge funds, often returning to their former firms. |
For example, Agus Tandiono, who broke away from Citadel LLC in 2009 to start an Asia-focused Income Partners hedge fund, returned after failing to raise enough capital. Of the more than 300 Asia-focused hedge funds that have been launched since 2009, at least 50 have been liquidated, with most of the assets being absorbed by larger funds. Pension funds and institutional investors, that now comprise the largest source of capital growth for hedge funds, prefer the larger funds with established track records, leaving smaller hedge fund managers scrambling for scraps.