About 20 percent of Asia hedge funds profitable in 2008

SINGAPORE (Reuters) - About 20 percent of Asian hedge funds have managed to make a profit so far this year with the industry's performance ranging from minus 40 percent to plus 20 percent, the head of UBS Asian prime brokerage said on Thursday.

David Gray, UBS's (UBSN.VX) head of prime services for Asia Pacific, told reporters that most hedge funds faced redemptions, including those that had performed well, as investors sought to raise their cash holdings.

The redemptions had been orderly, however, as most funds stayed liquid in anticipation of investors asking to withdraw their money.

"For sometime, many funds have been in capital preservation rather than any profit-driven mode," Gray said. "We've seen that globally and regionally that clients de-risk quite substantially and their leverage rates are down."

"Hedge funds here (in Asia) have used less leverage and have invested less in illiquids," he added.

UBS's Asian prime brokerage, which employs 68 people across the region, says it is the third largest prime brokerage in Asia after Goldman Sachs and Morgan Stanley.

(Reporting by Kevin Lim and Harry Suhartono); Editing by Anshuman Daga)