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SINGAPORE, Aug 1 (Reuters) - Investors almost halved the money they put into Asia-focused hedge funds in the second quarter compared to the first three months of the year as a selloff in stocks hurt appetite for risky assets, data showed.

Asia-focused hedge funds received a net $530 million from investors in the April-June quarter, down from $1 billion in the first quarter, Chicago-based Hedge Fund Research said in a statement released late on Thursday.

Asian hedge funds grew by approximately $200 million to $100.48 billion, up just 0.25 percent from the first quarter, as inflows were mostly offset by a decline of nearly $320 million due to poor performance.

“Asian hedge fund investors reacted to continuing market volatility by adjusting allocations opportunistically to those regional markets that had posted sharp year-to-date losses,” said Kenneth Heinz, president of Hedge Fund Research.

The bulk of Asian hedge funds are focused on equities rather than macro-strategies such as those investing in currencies, which outperformed stocks this year.

Other analysts said managers of small funds could suffer more from market turmoil than large funds that are still attracting cash, with a greater investor focus on governance.

For example in late April Hong Kong-based distressed debt specialist ADM Capital said it has raised $418 million with the launch of a fund, helping the hedge fund manager to boost its overall assets to $2.4 billion.

“Generally what’s happening is that the large institutional managers with respectable numbers are still seeing inflows, but the smaller managers are seeing almost nothing,” said Peter Douglas, founder of hedge fund consultancy GFIA.

“Smaller managers, that have poor numbers, such as many of those focusing on China and India, have in fact seen substantial outflows.”

PricewaterhouseCoopers said in a survey earlier this year investors putting money in alternatives such as hedge funds or private equity are focusing on governance as returns fall.

“Now that returns are moderating and the sector has matured somewhat, the survey reveals that investors are going to be more exacting,” PwC said.

Hedge Fund Research said its HFRI Emerging Markets Asia ex-Japan index fell more than 2.2 percent in the second quarter, bringing the year-to-date decline to over 13.8 percent. The HRFX Japan index gained 4.8 percent, narrowing the year-to-date loss to just over 7.1 percent.

Assets that deployed equity hedge strategies declined by $600 million in capital, while the less directional macro and arbitrage strategies gained in the second quarter, the research showed.

Equity-focused strategies accounted for over 63 percent of assets and more than 74 percent of the total number of Asia-focused funds.

A stronger reliance on long/short equity strategies prevented a meltdown in Asia last year when some credit-linked hedge funds in the United States and Europe collapsed amid a worsening credit crisis.

Analysts have said Asian hedge fund managers will likely close down or be bought out in growing numbers this year in a painful bout of consolidation triggered by financial market turmoil. [ID:nPEK170370].

Japan's Nikkei 225 .N225 lost nearly 12 percent from the start of the year to the end of June, India's Sensex Index .BSESN fell about 34 percent and Chinese stocks .SSEC dropped 48 percent in that period. [ID:nSP235321] (Editing by Neil Chatterjee)