Asia's growth story has whetted the appetites of institutional investors around the world, but they are struggling to buy into the opportunities on offer because of a lack of suitable local fund managers, says HedgeFund Intelligence.
One of the problems investors must deal with, says Aradhna Dayal, head of Asia for the global provider of hedge fund news and performance information, is a mismatch of size.
University endowments in the United States and major pension funds of aircraft companies and carmakers, for example, were enthusiastic about Asia, Dayal said. But they had a struggle trying to invest with local fund managers which were too small for them.
'All of them say that Asia is a long-term growth story and there is no reason why they should not go there. But not even 5 per cent of their portfolio is allocated in Asia, when it should be 10 or 15 per cent,' she said.
'Why? Because it is so challenging to find the right manager on the ground.
'If I am a pension fund, my minimum investment is US$100 million to US$200 million. But a local manager is typically only US$20 million in size. That's too small.'