Hedge fund trade body hurdles Great Wall to land in Shanghai

The Hedge Fund Association representing hedge funds and their clients has established a presence in Shanghai, as allocators from Manhattan to Geneva increasingly focus on the country’s talented alternatives managers.

The HFA office will be headed by Yiming Di, principal at China-focused consulting firm Schmittzehe and Partners.

He will work not only with the city’s alternative investment firms, but also to help educate the public there about the Chinese hedge fund industry.

Adam Steinberg, director of the HFA’s China chapter, said: “The HFA’s objective is to encourage education about hedge funds and to contribute to the conversation and development of the hedge fund industry in China.”

The development comes as China experiences an astronomic rise, not just in its economic and political power, but also its regional importance in the hedge fund realm.

Some 30% of hedge fund firms investing in Asia are headquartered in China, up from 20% back in March 2009. Globally, China is behind only the US, UK and Switzerland as the preferred location for hedge funds.

“It is difficult to overstate how important the ability for investors to access Asian markets and investors as an integral component of the growth of the global hedge fund industry in coming years,” said Kenneth Heinz, president of Hedge Fund Research recently. HFR has also had an office in China, for over a year.

“China will continue to emerge as the capital of the Asian hedge fund industry, representing integral access to specialized local expertise and insight of Asian markets as sophisticated hedge fund strategies evolve to operate in these markets.

“As this occurs, funds operating in Hong Kong, Shanghai and Singapore will be as relevant and significant to investors as those operating in New York, London and Zurich,” Heinz said.

Hedge funds investing in emerging Asia made 7.4% in the first quarter, the best start of the year for this community since 2006. They also beat Chinese equity markets, by over 4.5%.

The money was following the gains being made by funds in the region, as total capital invested in the Asian hedge fund industry grew by over $4.5bn since the end of 2011, to hit $86.6bn by March 2012.

An increasing number of investors in alternative funds are analysing Chinese hedge funds, run by locally based managers.

Switzerland’s Bank SYZ & Co is one, with a fund selection presence in Hong Kong. Its €8.1m Oyster Multi-Manager Asia fund allocates 43% of its assets to China, all into local equities hedge funds.

 

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