Billionaire hedge fund manager John Paulson has won a securities license in Hong Kong, joining the likes of GLG and Soros Fund Management in making a beeline for the high potential Asian alternative investment management industry.
Paulson’s win, following the establishment of high-profile start-ups such as a US$1 billion-plus fund planned by Goldman Sachs’ trader Morgan Sze and Tiger Management founder Julian Robertson’s backing of Nezu Asia fund, comes as a major stamp of approval for the region, which is emerging as a hub for hedge funds.
With Asian hedge funds projected by fund tracker Eurekahedge to add about US$40 billion this year to their current assets of US$125 billion, the industry’s prospects in the region present a powerful attraction to global players.
“The establishment of material regional presence by the major global hedge fund complexes continues and these investments are cause for optimism for the sector locally,” said Harvey Twomey, head of prime finance sales, consulting and capital introductions in Asia-Pacific for Deutsche Bank.
Surging local wealth in the Asia Pacific, where there are more than 3 million US dollar millionaires, will also find its way into hedge funds.
Other big industry names such as Moore Capital, Maverick Capital and Viking Global Investors are also eying the region as a major destination for future growth.
Paulson, whose bet that the US mortgage market would -implode made him one of the world’s wealthiest people, received the license to deal in securities on Feb. 21, according to records with Securities and Futures Commission in Hong Kong.
Anyone operating in the financial markets in Hong Kong needs the license, which enables them to deal in stocks, stock options, bonds and collective investment schemes.
The hedge fund industry stalwart earned an estimated US$5 billion last year, mainly through bets that the economy would recover.
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