$200 billion predicted to flow into Asian Hedge funds this year

Investors may pile more than $200 billion into hedge funds this year, with strategies focused on Asia excluding Japan in greater demand despite concerns about the global economy and waning risk appetite, Deutsche Bank said recently.

The bank's annual Alternative Investment Survey also showed that 58 percent of investors would not consider applying leverage – investments with borrowed funds – to their portfolio this year.

"Hedge fund investors' predictions that Asia, along with the Middle East and Latin America, will be the top-performing regions in 2008 indicate a clear re-allocation of capital towards emerging markets," said Denis MacCarthy, head of equity sales Asia ex-Japan at Deutsche Bank. Deutsche said that 70 percent of hedge fund investors do not currently apply leverage to their portfolios in a sign that market participants are becoming reluctant to take too much risk in the aftermath of the collapse of the U.S. subprime mortgage market, which also blew up several hedge funds.

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