By Summer Zhen
       HONG KONG, April 16 (Reuters) - Asia-focused hedge funds
started 2024 with a strong first quarter, cashing in on a
prolonged rally in Japanese stocks, a tentative turnaround in
Chinese equities, and a boom in artificial intelligence (AI)
stocks.
    Most stock markets across Asia - from Japan and India to
mainland China - ended the first quarter higher, as expectations
for U.S. interest rate cuts lifted global equities. 
    Hedge funds that use an Asian equities long/short strategy
rose 2.9% in the first quarter, according to data from
Eurekahedge. 
        A long/short strategy involves the fund buying and
holding stocks it thinks will rise in value, known as taking a
long position, while selling shares it has borrowed for equities
it expects will decline in value, known as taking a short
position.
  
        Asia-focused multi-strategy hedge funds that invest in
different asset classes such as equities and commodities posted
a 3.7% return, Eurekahedge data as of April 16 showed.
  
        Pan-Asia funds with exposure to Japan rose broadly for
the first three months of 2024, according to investors. Panview
Asian Equity Fund, run by former Goldman Sachs partner Ryan
Thall, jumped 15.5%, taking its assets under management to more
than $1 billion, according to a source who received data on the
fund's performance.
    Singapore-based FengHe Group saw its $3.3 billion Asia Fund
return 6.6% for the first quarter, after a 9.2% gain for 2023,
said the source.
    Spokespersons for Panview and FengHe confirmed their
performance.
    The Nikkei share index rose to a record last month
and jumped 21% in the first quarter alone, led by signs the
world's fourth-largest economy is emerging from deflation and
companies are taking steps to improve governance. Eurekahedge
data shows Japan-focused equity hedge funds were up 5% during
the period.
    “Equity long-short and multi-manager platforms have
benefited from strong markets such as Japan and India,” said
Benjamin Low, a senior investment director at global investment
advisory firm Cambridge Associates.
    
        NIMBLE IN CHINA 
  
    Even some China-focused hedge funds were able to ride the
volatility and post decent returns. 
    Chinese stocks have stabilised since February, after three
consecutive years of steep losses, as the country's securities
regulator intervened with steps to stem selling. The benchmark
MSCI China index has bounced 10% since Jan. 22.
    Investing in procyclical sectors ranging from energy to
industrial, as well as internet and high-yield stocks, has led
to outperformance, according to investors.
    Betting on Chinese food delivery giant Meituan
helped Hong Kong-based First Beijing yield returns of 6.3%,
according to a source who was briefed on its performance.
    Some hedge funds benefited from bullish wagers on the AI
supply chain across the U.S., Taiwan, and mainland China. Grand
Alliance Asset Management’s Sino Vision Market Neutral Fund
notched a 6.1% net gain for the first quarter, with a majority
of returns driven by AI-related trades, the fund reported.
    “We believe we are in the early innings of AI and we have
already seen proven ROI (return on investment) across various
end markets,” a spokesperson for Grand Alliance said in an
email.  
    Multi-manager hedge funds leaning towards equities also had
a good start. Infini Capital Management's, Dymon Asia's, and
Pinpoint Group's multi-strategy funds posted 7.6%, 6.5% and 4%
gains, respectively, the funds said.
    The biggest losers of the quarter were China's quantitative
hedge funds, which were hit by the regulatory crackdown in
February that imposed trading restrictions and forced them to
adopt new styles of trading.
        Jupiter Tactical Trading Fund, which is related to
Shanghai Minghong Investment Management, and the overseas
quantitative funds of Ubiquant, both recorded double-digit
losses in the first quarter, said two investors who received
data on the funds' performance.
  
        Jupiter did not reply to a request seeking comment.
First Beijing and Ubiquant declined to comment. 
  
        
             Asia Hedge Funds                          Q1
                                           performance
                                           
 FengHe Asia                               6.6% 
 Panview                                   15.5% 
 Kaizen Capital Partners                   5%
 Greenwoods - Golden China Fund            8.4% 
 Keystone                                  10.8% 
 Golden Pine                               7.8% 
 First Beijing                             6.3% 
 Golden Nest                               3% 
 Grand Alliance - Sino Vision Market       6.1% 
 Neutral Fund                              
 Pinpoint - Multi-Strategy Fund            4% 
 Segantii Asia-Pacific Equity              2.5%
 Multi-Strategy Fund                       
 Infini Global Fund                        7.6% 
 Dymon Asia - Multi-Strategy Investment    6.5% 
 Fund                                      
 Sources: investors, newsletters and prime brokers;
 Kaizen, Greenwoods, Segantii did not reply to requests
 seeking comment; Keystone, Golden Pine, First Beijing,
 Golden Nest declined to comment.
 

 (Reporting by Summer Zhen; Editing by Vidya Ranganathan and
Christian Schmollinger)