AIMA Japan and Eurekahedge Gauge Asia Hedge Fund Sentiment

Japan-2New York (HedgeCo.Net) – In March and April 2014, a survey was conducted by AIMA Japan and Eurekahedge looking into investment trends and key regulatory challenges facing the Asian asset management industry; with a particular emphasis on the outlook for Japan.

Japanese investors plan to maintain the size of their hedge fund allocations this year, the survey says. Many respondents indicated that they intend to raise their exposure to long/short equity hedge funds and event-driven strategies, with allocations on average being reduced to CTA/managed futures funds, macro funds and fixed income strategies.

131 respondents contributed their insight from various financial sectors – a 39% majority from investment advisory, 14% from banking, 15% from consultancy and 11% from hedge funds, with the remainder from family offices, insurance companies, asset management, trust banks and pension funds.

Notable results from the survey, which were calculated on an average basis from the respondents, showed that Japanese investors remain bullish on the prospects of the Japanese economy, with 72% of survey respondents hopeful that Abenomics will continue to yield positive results in 2014.

Other findings from the survey found that investors plan to increase their allocations to Global, Asia ex-Japan and Middle East/Africa mandated funds, while trimming their portfolio exposure to Latin America and Europe. Their exposure to Japan would be maintained at the current level.

Survey results found that investors intend to increase their exposure to long/short equities and event driven strategies while curtailing exposure to CTA, macro and fixed income strategies. Ranked high on a list of anxieties were regulatory challenges such as increased J-FSA inspections, and the Dodd-Frank Act.  Amongst the geopolitical and economic issues, China was the topic that ranked first in the list of concerns going forward, followed by interest rate volatility triggered by the Fed’s QE phase out.

For the majority of the investors in the survey, performance, risk management and track record were the key factors behind their investment decisions. Brand names, governance structure and liquidity ranked lower on the scale.

Editing by Alex Akesson
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