Bloomberg- An increasing number of hedge fund managers in Asia are making loans to small companies as they search for more stable returns, according to the chairman of Singapore’s hedge fund lobby.
As many as 25 percent of funds managing a combined $200 billion in Asia extended such loans last year, Peter Douglas, chairman of the Singapore chapter of Alternative Investment Management Association, said in an interview yesterday. That’s up from less than 10 percent in 2006, he said.
A dearth of available credit from banks for small Asian companies has created a niche for funds, including Singapore- based EuroFin Asia and Hong Kong-based Cube Capital Group, which charge interest as high as 20 percent for short-term loans. The arrangements offer a way to stabilize returns for an industry roiled by the collapse in global equity and debt markets.
