The Asia 100

Asia’s fund managers, who not long ago were basking in the glow of the region’s hot economies, face mounting challenges. The vaunted Chinese economy is slowing down, squeezing company earnings and stock prices. Japan is making a comeback of uncertain degree under the stimulative policies of Prime Minister Shinzo Abe. Meanwhile, hints of a withdrawal from quantitative easing policies by the U.S. Federal Reserve are threatening to tighten liquidity across Asia, roiling capital markets. India and Indonesia have raised interest rates recently in a bid to defend their currencies.

These trends are making it harder for managers to generate strong returns in a region that claims about two thirds of the world’s emerging-markets assets. The economic currents from China and the U.S. “have combined to create a period of intense uncertainty in markets,” says Andrew Swan, head of Asian fundamental equities with BlackRock Asset Management. But “this does not mean there are no opportunities for investors in China,”  he adds, and “ a stronger U.S. would be beneficial for Asian exporters such as Korea and Taiwan.”

Firms in Institutional Investor’s Asia 100, which ranks the region’s largest fund managers, increased their total assets under management by just 1.3 percent in the latest year, to $13.88 billion at March 31, 2013. Those numbers may exaggerate the weakness, though. Firms in Japan, home to the region’s biggest fund managers, saw their asset totals depressed, in dollar terms, by the decline of the yen, which is one of the tools Abe is using to jump-start the Japanese economy.