HSBC private bank bets on new hedge funds in Asia
Lender with US$25bto invest sees potential in the region'searly-stage managers
HSBC Holdings private bank unit, which invests US$25 billion in hedge funds globally, sees opportunities in backing new Asia-based managers, said Henry Lee, regional head of its alternative investment group.
About 15 per cent of the managers in an HSBC programme that provided capital to smaller hedge funds were based in Asia, Lee said. It has made early-stage investments in regional managers such as Hong Kong-based Zeal Asset Management, Myriad Asset Management and Tybourne Capital Management (HK).
HSBC is eyeing early-stage investments in Asian managers as rivals have reduced research staff in the region after the 2008 global financial crisis in attempts to cut costs, raising barriers for smaller hedge funds to expand assets.
"With less proprietary trading than before and less assets under management trading those hedge-fund strategies than before, Asia's markets are providing an excellent playground for talented individuals to express themselves," Lee said.
While chances to back early-stage managers abound in the US and Europe, "we feel Asia provides just as good opportunities and we are willing to spend time doing it".
It is cheaper to run a hedge fund in Asia, where small funds also find it difficult to raise capital, according to a report released by Citigroup last December.