Developing Asia represents one most promising long-term markets for asset managers. Rising economic growth has created a burgeoning class of wealth and sophisticated institutions and family offices with the capabilities and desire to invest in alternative assets. Rapid aging – China's workforce is forecast to peak in the coming decade – will further pressure Asian governments to preserve capital and generate excess returns. Despite well publicized forays into alternative investments – most notably China's investment in Blackstone – hedge fund managers are still struggling to gain traction in many Asian markets. Further, these markets bring potentially severe regulatory challenges that counterbalance their economic appeal.
This article will survey the successes and failures that established hedge fund managers have experienced in expanding their franchise to developing Asian markets. It will explore the question of entrance timing and consider the benefits and drawbacks to being an early mover into these markets.