All over the world, the use of hedge funds has been steadily increasing in recent times. This is because hedge funds can be and have been used in various different markets, may be modified for strategic purposes, and use multiple different risk management techniques and financial instruments in order to allow those associated with them to garner the most benefits.
What is a Hedge Fund?
A hedge fund is an important tool used by investors, and individuals who are seeking to increase their personal net worth. Hedge funds are usually administered by an investment management firm. They are ordinarily established in a manner similar to the establishment of a limited liability company or a limited partnership.
Hedge Funds in Hong Kong
The growth of the use of hedge funds around the world has been replicated in Hong Kong. Over the last decade, the hedge fund industry has grown at a remarkable pace. In fact, such has been the prevalence of hedge funds that today, Hong Kong is the leading hedge fund hub in Asia. According to the latest statistics, the total value of assets under management which are tied to hedge funds in Hong Kong is US$92.1 billion. These assets are overseen by a total of 449 hedge fund managers located all over Hong Kong.
Many hedge fund investors based in Hong Kong today are family offices. Family offices comprise approximately 43% of all such investors located there. Other groups which make up significant portions of hedge fund investors in Hong Kong include wealth managers, asset managers, investment companies, and corporate investors.
Growth of Hedge Funds
Some of the reasons why the use of hedge funds has grown so rapidly in Hong Kong include the ability to use hedge funds to gain greater access to the massive and lucrative market in China, the high standards of regulatory controls which surround the industry, and the availability of a talent pool which is among the world’s best in this area.
Allocations provided by investors as well as an increase in performance level have ensured that Hong Kong’s hedge fund industry has continued to develop in a way befitting of its status as a global hedge fund hub.
Hedge funds in Hong Kong are expected to become even more prominent in time to come. This is because many asset owners from all over the world have expressed interest in allocating their assets into the Asia-Pacific region. This is due to its robust economic growth and potential for profit. In this way, such asset owners will be able to gain increased international exposure with Hong Kong hedge funds.
Strategies of Hedge Funds
Regarding strategies used by such investors, most hedge fund investors tend to favor the long/short equity strategy archetype. Other strategies frequently employed are the diversified, macro, and relative value arbitrage strategy types. Around 60% of the core strategies which are in use by Hong Kong-based hedge funds are equity strategies. Most of the non-equity strategies which are used are multi-strategy approaches, macro strategies, and event-driven strategies.
Alternatives to Hedge Funds
Of course, despite the many advantages which come with the proper use of a hedge fund in Hong Kong, doing so is not the only way for you to turn a profit in Hong Kong. Another way by which one may do so is by starting a company in Hong Kong’s thriving business scene. This is where we at Paul Hype Page & Co will play our part. Our incorporation team possesses a wealth of knowledge about the facts related to the setup of a Hong Kong company. Through our assistance, your new company will be certain to develop and flourish; thus, the profits which you will realize through your company will be ever-increasing.