Asia’s hedge funds are standing firm in their confidence toward technology companies, despite recent declines in artificial intelligence stocks that have tempered an otherwise robust start to the year.
FengHe Fund Management Pte’s $3.6 billion fund reported gains of 11.3%, buoyed by astute investments in technology supply chains. CloudAlpha Capital Management’s Singularity Tech Fund similarly excelled, notching a 28% gain in the first half of the year, sources familiar with the matter disclosed anonymously due to the private nature of the information.
The broader hedge fund landscape in Asia has shown resilience, with the Eurekahedge Asian Hedge Fund Index climbing 4.6% in the six months through June, signaling a recovery from the tumult of recent years.
However, challenges persist, particularly in Greater China where hedge funds struggled, as reflected by the Eurekahedge Greater China Hedge Fund Index’s modest return of just under 1% in the first half, lagging behind other regions.
Despite the volatility, FengHe Fund Management’s CEO Kwek Hyen Yong remains optimistic, likening the current market corrections to historical internet-related downturns that did not hinder long-term growth. Kwek emphasized that valuations in AI-related companies have adjusted favorably, prompting strategic plans to increase exposures in the second half of the year.
CloudAlpha Capital Management’s Singularity Tech Fund thrived on investments in semiconductor and hardware stocks benefiting from AI infrastructure expansion. Similarly, Rays Capital Partners Ltd.’s Asian Technology Absolute Return Fund surged 42%, driven by savvy bets on semiconductor and capital goods in South Korea and Japan.
Japan’s equity market resurgence, bolstered by governance reforms, also contributed to strong performances. Panview Asian Equity Fund, for instance, soared 24.3% in the first half, fueled by strategic trades aligned with Japan’s evolving economic landscape.
Looking forward, hedge funds are cautiously optimistic about opportunities in Asian markets, particularly with potential rate cuts anticipated in the US and Europe, which could redirect investment flows back to Asia.
As hedge funds navigate these dynamics, some have adopted shareholder-friendly measures and strategic positions to mitigate risks and capitalize on emerging opportunities, reflecting a nuanced approach to navigating the complexities of the current financial landscape.
