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Hong Kong Hedge Funds' Assets under Management Reach New Record

Hedge funds in the Chinese financial hub had a record US$120.9 billion in assets under management as of September 2014.

Despite fears that political clashes, between pro-democracy youth and the pro-Beijing establishment, will lead investors to divest away from Hong Kong, the Chinese city is still an investment magnet.

Hong Kong’s hedge fund assets under management reached a record high in 2014, according to the report of the survey on hedge fund activities of SFC-licensed managers and advisers published today by the Securities and Futures Commission (SFC).

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The SFC report shows that as of September 30, 2014, hedge fund assets under management (AUM) in Hong Kong reached US$120.9 billion, an increase of 39% from the amount reported in the previous survey in September 2012.

The report also shows that Hong Kong hedge fund managers mainly adopted an Asia- Pacific-focused equity long/short and multi-strategy. Additionally, overseas institutional investors made up the majority of the investor base.

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The main finding of the report is that Hong Kong’s hedge fund industry has continued to grow. The number of hedge funds managed by SFC-licensed hedge fund managers in Hong
Kong increased from 676 in 2012 to 778 as of September 30, 2014. The number of hedge fund managers increased from 348 in September 2012 to 401 in September 2014.

The 2014 total hedge fund AUM in Hong Kong surpassed its previous peak in 2008 and represented over 13 times the US$9.1 billion AUM in 2004, the earliest year covered by SFC surveys.

Institutional investors accounted for 66.9% of the total AUM and was the largest group by
investor type. They included funds of funds, financial institutions, pension funds,
endowments, foundations, sovereign wealth funds and government-related entities.

 

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