Crisis to spur big Asia hedge fund shake-out

Reuters – Asia’s hedge fund industry, one of the world’s worst performers even before the latest surge in volatility, will see a major shake-out as the global financial turmoil shuts down a huge swath of managers.

Few in the industry will guess at how many of an estimated 1,200 Asia-Pacific-focused hedge funds will fold in the months ahead. But higher losses and rising redemptions suggest things will be proportionately worse than for U.S. and European funds, they warned.

"This is a watershed for the industry … a lot of players are not going to be here by early next year. Those with high leverage and many smaller players will be gone," said Low Jeng-tek, the Asia head of UK-based fund of hedge funds manager Gems Advisors, which oversees more than $7 billion.

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