The HFRX Japan Index, used as a benchmark for Japanese hedge fund performance, posted a narrow decline of -1.5 per cent in the second quarter, from a gain of 5.2 per cent in the first quarter. Hedge funds investing in China experienced a similar decline, with the HFRC China Index dropping -1.6 per cent. 

Around $88 million in net new capital was poured into Asia focused hedge funds during the period, with flows concentrated in Japan focused funds. Despite the volume, total capital invested in the Asian hedge fund industry still dropped by $3.3 billion from the previous year, bringing total capital dedicated to the region to $83.3 billion.

Asia focused hedge funds represent nearly 15 per cent of the total global hedge funds. 

"The Asian hedge fund industry is rapidly developing, with funds implementing dynamic commodity and currency-based strategies across local regions, including mainland China. These are likely to provide global performance leadership and attract capital from US, European and Emerging Markets investors seeking new opportunities in coming quarters," said Kenneth Heinz, president of Hedge Fund Research, the firm that released the performance figures. 

The release was concurrent with the launch of three new indices under HFRX, bringing the current total to 76.