WEST PALM BEACH, FL (HEDGECO.NET) – There is a growing need for experienced hedge fund managers in Asia, according to a statement made by an official of Credit Suisse First Boston [CSFB]. Today thereis a shortage in Asia of hedge fund managers specializing in stock short-selling techniques. Short selling techniques involve selling short borrowed securities, which the seller does not own. Hedgefund managers to profit from falling stocks often use this strategy. Managers using such a strategy will eventually buy back such securities, with the hope of making money from the pricedifferentials.
According to Peter Douglas, of GFIA Pte Ltd, a Singapore hedge fund consultancy, as much as 65 percent of hedge fund managers in Asia are equity long-short focused. Douglas said, �And that’s partly a function of Asian capital markets, because you have only really had a sensible fixed income market since 1997, apart from Japanese Government Bonds. Derivatives have been patchy,� Douglas explained.
Tim Schuler, a director of a hedge fund group said, �In a lot of cases, almost all of them (hedge funds) are long-short equity focused. A majority of them have come from the long-only side,� according to him. Timothy Schuler made those remarks speaking to a Reuter�s correspondent at a recent conference.
Selecting an experienced hedge fund manager often impacts the performance and returns posted by such funds. According to an estimate by hedge fund industry officials, about 60 percent of the returns made by funds-of-hedge-funds come from selecting the correct hedge fund managers.
Schuler added, �We are really focused on managers that are looking to extract �alpha� from both their long book and their short book, not just simply using their short book as a hedge. And to that end, it�s a difficult process because most of them don’t have prior shorting experience,� according to him.
Schuler�s firm currently invests in 15 Asia based funds-of-hedge-fund, according to him, the recent sharp decline in Asian markets means that his company will look to hire more Asian hedge fund managers. Schuler added, �We may go back now and in fact devote more effort to try to find additional Asian managers because we know that some point down the road, six or twelve months, the opportunity is going to be larger here than other markets simply because there was a pullback of the nature and the size we witnessed,� Schuler added.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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