There are plenty of opportunities for hedge fund managers to boost their returns in Asia, considered a “sweet spot” by most U.S. investors, according to a top executive at a NewYork-based investment firm, who spoke at Reuters 2015 Wealth Summit in New York.
Michael Weinberg, chief investment strategist at Protege Partners, said betting against, or shorting, a number of Asian shares offers a chance for hedge funds.
Another window is the price gap between a company’s stock listed in China or “A” share and its Hong Kong-listed counterpart or “H” share. With offshore investors now allowed to invest in Chinese equities, Reuters said there is “room for classical arbitrage opportunity” between a firm’s “A” and “H” shares.
“These are right in the sweet spot of what (our clients) are looking for,” Reuters quoted Weinberg as saying.
The Chinese economy is largely expected to grow at its slowest pace in more than two decades this year, with the government targeting a 7% expansion, though some economists including the IMF forecast a 6.8% rise this year. That’s a far cry from the double-digit growth rates that China used to enjoy for more than two decades that catapulted the country to become the world’s second-largest economy, overtaking Japan.
Protege, which focuses its investments on established smaller hedge funds and select emerging markets, has deployed $2 billion to smaller hedge funds worldwide and has been meeting Asian-based managers.
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