UK-hedge fund manager Algebris Investments is in talks to establish an Asian business over the next months, joining the ranks of Western fund houses seeking to tap the region's rapid growth, a report by Reuters reveals.

Algebris, which was founded by Davide Serra and Eric Halet, has $1.6 billion in assets under management. Unnamed sources reportedly told the publication that activist investor Christopher Hohn, known as the founder of the now-defunct Children's Investment Fund, is backing the Asian endeavour.

Asian emerging markets have become more appealing to Western fund managers looking to exit the comparably rocky and unregulated economies from where they originate. According to a recent survey by EurekaHedge, while Asia's hedge fund climate may not be fully adjusted in the wake of the global financial crisis, the strong prospects remain locally, particularly as the bulk of the declines over the past years are attributed to poor international activity.

Some of the firms that have recently set up a base in the region include Soros Fund Management, GLG, and Viking Global Investors.

Algebris has declined to comment on the matter, but the sources had told the news service that key officials from the firm have begun visiting potential Asian locations since early this year and have narrowed down the choices to Hong Kong and Singapore.