Chicago-based Hedge Fund Research firm found that such funds gained 7.4 per cent in the three months ended 31 March, a sharp contrast to 2011 when the HFRI Asia ex-Japan Index fell by 18 per cent.

In the first quarter of 2006, hedge funds investing in Asia rose by 12.3 per cent.

HFR also said that the number of Asia-focused hedge funds rose to 1,101, approaching the record level of 1,107 at the end of 2007. Total capital invested in the Asian hedge fund industry increased by $4.5 billion to $86.6 billion in January to March, the firm said.

“It is difficult to overstate how important is the ability for investors to access Asian markets and investors as an integral component of the growth of the global hedge fund industry in coming years,” said Kenneth Heinz, president of HFR.

The firm also said that China has continued to emerge as the preferred location for hedge fund firms investing in Asia, with 30 per cent headquartered in the Middle Kingdom. China trails the US, UK and Switzerland as the preferred location for hedge funds worldwide, ahead of both Canada and France by number of hedge funds, the firm said.