Beyond performance: What institutional investors expect from Asian fund managers

At a seminar on 28 October hosted by DBS Hong Kong, Altura Governance and Conyers, panellists argued that institutional investors evaluating Asian managers now weigh governance, operational readiness and fund structure alongside performance. Alvin Fan, director and chief executive of OP Investment Management, said allocators had become markedly more demanding as Asian managers improved, and that Asian managers were held to the same standard as their US and European peers. He described the current market as the best but also the most competitive environment to raise capital, with investor appetite for Asia polarised between allocators who had doubled down over the past two years and those unlikely to deploy there for some time. With many managers clustered in a return band of roughly 15 to 19 per cent, differentiation increasingly came from how clearly a manager could articulate its edge.

On governance, Niaz Khan, global CEO of Altura Governance, said an independent director alone was insufficient; allocators, including pension funds and endowments, wanted directors with genuine directorship experience and working knowledge of the Cayman structure. Piers Alexander, partner and global head of investment funds at Conyers, said independent board oversight was a regulatory expectation under the Cayman Islands Monetary Authority's corporate governance rule. Samantha Widmer of Cayman Finance, whose figures Alexander cited, positioned Cayman as the leading domicile for investment funds. Alexander said institutional onboarding committees were familiar with Cayman vehicles and that introducing another jurisdiction could create friction, though he acknowledged a manager raising money in a single jurisdiction with government backing might prefer a local vehicle. Open-ended Asian funds typically use Cayman exempted companies or segregated portfolio companies, closed-ended funds generally use exempted limited partnerships, and Japan-facing offerings often use the Cayman unit trust.

For emerging managers, Fan said performance was a minimum requirement, and managers should agree milestones with allocators, stay personally available, and have due diligence materials ready from the first meetings. He said OP's regulatory platform had supported the team behind DeepSeek, which emerged from High-Flyer, between 2017 and 2019. Around half of the funds and portfolios OP launched this year were separately managed accounts.

Pauline Leung of Forvis Mazars said Hong Kong's proposed carried interest concession enhancement, still subject to Legislative Council approval, would take effect retrospectively from 1 April 2026 and extend to hedge and credit funds. Carried interest must be profit-related, and a licensed advisory firm could potentially qualify. On operational due diligence, CeCe Choi of Forvis Mazars said allocators focus on regulatory compliance, cybersecurity and IT controls, and third-party risk, and that regulators do not allow managers to outsource accountability. Alexander described missed filings, late financial statements, unpaid fees or fines as immediate red flags, and Fan and Khan recommended mock due diligence reviews before allocators conduct them.