Asian hedge funds delivered their strongest performance in 15 years in 2024, capitalizing on market volatility, winners in China’s shifting economy, and emerging opportunities in artificial intelligence (AI). According to the HFRI Asia with Japan Index, which tracks hedge funds primarily investing in the region, the index surged by 12.1% in 2024—marking its best annual return since 2009. HFR is one of the largest global hedge fund data platforms.
While 2024 was a turbulent year for many investors, with capital flows shifting from Asia to stronger dollar assets, deflation risks in China, and massive unwinding of yen-funded carry trades, hedge funds managed to navigate these challenges. However, investors anticipate continued difficulties for trading in Asia in 2025, influenced by geopolitical uncertainty and the potential implications of Donald Trump’s second term as U.S. president.
Many China-focused hedge funds excelled by capitalizing on the nation’s evolving economic landscape. Hong Kong-based Keywise Capital, managing $2 billion, saw its flagship Mega Trend strategy gain 51% in 2024, thanks to well-timed investments in companies benefiting from trends like Gen Z consumption, including retailer Miniso and power supply companies such as China Yangtze Power, which saw gains from AI demand. Keywise’s tech-focused Penguin Development Fund also posted a remarkable 71% return. Fang Zheng, Chief Investment Officer of Keywise, highlighted that AI, clean energy, and businesses appealing to younger consumers will be critical trends, with AI expected to significantly impact human emotional intelligence (EQ) applications in 2025.
First Beijing, a China-focused hedge fund, achieved a 42% return in 2024, driven by stakes in companies like Meituan, Atour Lifestyle, and Full Truck Alliance. These funds successfully capitalized on a brief but profitable opportunity following China’s stimulus package announcement in September. Goldman Sachs’ Timothy Moe noted that hedge funds were quick to exploit rallies in China, increasing positions when the market surged and reducing them when the rally peaked in early October.
Across the region, fundamental long-short funds in Asia posted an average gain of 14.1%, surpassing their counterparts in the U.S. and Europe, which reported returns of 13.2% and 4.6%, respectively. Multi-strategy funds based in Asia also enjoyed a strong year, with Dymon Asia, Pinpoint, and Ovata Capital all delivering double-digit returns.
Singularity Tech Fund, managed by CloudAlpha Capital Management in Hong Kong, saw a more than 70% increase in 2024, thanks to successful positions in semiconductors and data center infrastructure. Meanwhile, Panview Capital’s flagship pan-Asia fund rose 41%, largely driven by significant investments in Japan.
Despite the impressive returns, analysts caution that China remains a challenging market for global allocators. Patrick Ghali, Managing Partner of Sussex Partners, noted that interest is shifting toward Asian multi-strategy funds and Japanese funds, which are perceived as operating in more predictable regulatory and political environments.
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