Cutting the Asia Fund Investments

In recent financial news, Gottex Fund Management Holdings Ltd., just cut in half its Asia fund investments to improve returns.  While last year, it’s Asia fund had 45 holdings, this year it is expected to have only 22, as reported by Co-Founder Max Gottschalk.

The Switzerland-based company invests $400 million in 38 Asia-focused funds, and the numbers are likely to drop to 30 now.

As Gottschalk explained, "When investors are looking to invest in Asia, they're looking for punchier returns. Funds of funds are earning part of their keeps by providing access to some of the younger, emerging managers or smaller managers."

Gottex isn’t alone in the shift that it’s making.  They are joining companies like Pictet & Cie to shift to have newer, lesser-known managers to boost their returns.  Gottex’s plan at the moment is to change about 20% of the Asia hedge funds it invests in each year, up from 15%.

As Gottschalk explained, "There's a perception that the Asia market, due to its increased risks, should generate higher performance. Also there's no doubt that Asia, and the Chinese economy in particular, are drivers of global growth."

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