The report said the region’s hedge fund sector has attracted an additional $33 billion of capital over the period from 2013 to 2014, a 29 per cent growth rate.

The three leading locations for Asia hedge funds are Hong Kong, Australia and Singapore, with Hong Kong accounting for the biggest single slice of assets, at $61 billion. The combined assets of funds in these three jurisdictions account for 87 per cent of all assets in the region. The biggest hedge fund manager in the region is Platinum Asset Management, based in Australia.

Equity-based hedge fund strategies are the most commonly used among fund managers with a focus on Asia-Pacific; 62 per cent of funds based within Asia-Pacific use an equity-based approach, and 55 per cent of funds investing in Asia-Pacific from other regions also invest primarily as an equity strategy, the study showed.

Fund managers investing in Asia-Pacific from beyond the region are more likely to employ a macro strategy when investing in the region compared to local funds.

Some 86 per cent of Asia-Pacific-focused hedge fund vehicles managed by local managers are structured as single-manager hedge funds. However, fund managers investing in the region from beyond its borders employ a greater variety of structures when investing in Asia-Pacific.

Some 17 per cent of non-Asia-Pacific based fund managers invest in the region through fund of hedge funds products. Preqin said these funds are a “key way for investors from outside Asia-Pacific to gain exposure to these markets through a fund which may be managed from the US or Europe. The regulatory European UCITS wrapper is another product used by managers from beyond Asia-Pacific to create hedge fund products investing in the region; 12 per cent of funds investing in Asia-Pacific from outside the region are structured as UCITS funds.”

Among other details, the report said that when examining funds on a risk-adjusted basis, Asia-Pacific funds typically had a lower Sharpe ratio than for all hedge funds until October 2014.

“The combined effect of stronger performance over most timeframes, and a drop in the amount of volatility exhibited by funds in the region, has led to Asia-Pacific-based funds, managed by fund managers located in the region, moving ahead of their 'all hedge funds' counterparts, in terms of Sharpe ratio, since the end of 2014,” the report added.

The best-performing Asia-focused fund last year was the Alchemy India Long-Term Fund, a long/short equity fund that racked up net returns of 60.6 per cent, ahead of the Merchant Commodity Fund, run by RCMA Asset Management, at 59.29 per cent.