(April 5, 2013) — Pensions, sovereign wealth funds, endowments, and foundations are the largest group owning assets invested in Hong Kong’s burgeoning hedge fund sector, research has revealed.
These institutional investors own 40% of assets invested in hedge funds in the region, with the largest allocation invested by pension funds at 11.7%. Endowments and foundations were the next largest allocators to the sector, with 10.8%. The figures were published by the Hong Kong Securities and Futures Commission (SFC).
The largest allocators overall were high net worth individuals and family offices, responsible for 22.6% of the market, followed by other hedge funds and funds-of-funds with 21.1%.
Total hedge fund assets under management in Hong Kong expanded from $63.2 billion in 2010 to $87.1 billion at September 30, 2012, an increase of 37.8%, the commission said. The number of hedge funds managed by SFC-licensed managers in Hong Kong increased from 538 in 2010 to 676 by September 30, 2012.
In terms of geography, US investors were keenest on Hong Kong’s hedge funds.
“Americas remained as the biggest source of investors, representing 42.6% of the total assets under management managed in Hong Kong as of September 2012. European Union investors’ share fell to 18.6% in 2012 from 24.3% in 2010,” the report said.
Smaller Hong Kong-based hedge funds have been gaining popularity too, which bucks a trend seen more widely around the world.
“The top 50 hedge fund managers accounted for 73.5% of the total assets under management as of September 2012 compared to 78.2% as of September 2010. Among the top 10 managers, two were fund of hedge funds managers,” the report said.
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