Asian hedge funds will attract a "wave" of new money that could more than double the industry's assets from its peak of $250 billion as the region leads the world's emergence from the deepest recession since World War II, according to GFIA Pte, a Singapore-based hedge fund consulting firm.

The industry in Asia will grow to two-to-three times its peak within the next five years as investors outside the region with little or no investments in Asian alternative strategies allocate to the funds, said Peter Douglas, principal of GFIA. The industry has shrunk by about 30 percent from the peak reached in the first half of 2008 following client withdrawals, he said.

"The underlying fundamentals of Asia appear relatively strong currently, compared with the US and developed Europe, and the consensus is that Asia's long-term growth advantage will lead to Asia increasingly becoming the engine of the world's growth," Douglas said in an interview Tuesday. "Investors want a part of this."