Hong Kong and the mainland have seen explosive growth in the size of their hedge fund industries, according to Hong Kong's top stock watchdog. Martin Wheatley, chief executive of the Hong Kong Securities and Futures Commission (SFC), said the impact was particularly dramatic for China-focused hedge funds, where total assets had jumped 63 per cent in the past six months. Mr Wheatley said the amount of money in China strategies had hit US$10.6 billion, up from US$6.5 billion at the start of last year. That growth rate was far ahead of the overall industry, which posted gains of 19 per cent in total assets for the first half of last year. Hong Kong's hedge fund community was also enjoying a boom time. Mr Wheatley said hedge fund assets hit US$28.3 billion last June, the most recent figures available, up 25 per cent since June 2006, when they stood at US$22.6 billion. The growth in China-focused funds spilled over to Hong Kong because most set up shop here. That was partly because Hong Kong allowed short sales on stock, while the mainland did not. Mr Wheatley, who was speaking in Hong Kong at a recent hedge-fund conference organised by the Alternative Investment Management Association, said the city was also proving the 'preferred choice' for Asia ex-Japan strategies. Hong Kong had also been benefiting from global funds of funds and macro funds that have been opening offices here. He cited figures from Hedge Fund Intelligence showing that total assets under management in hedge funds worldwide hit US$2.5 trillion last June. About two-thirds of the 19 per cent increase came from new investors. Despite Hong Kong's strong growth it has been facing stiff competition for hedge fund assets from other Asian locations, particularly Singapore. Managers say that Singapore's regulators were more welcoming and that setting up shop was much easier. The SFC in June moved to combat some of that criticism. It eased its licensing regimen, giving expedited clearance to hedge funds licensed in the United States or Britain. Mr Wheatley said flexibility was an example of how the SFC encouraged hedge funds in the city. He said the SFC approved 37 hedge funds in the first three quarters of last year, up from 29 in 2006. 'We encourage potential licence applicants to meet with us before submitting their licence applications. By engaging in this dialogue, we find that we simplify the licensing process for applicants and that we tend to receive applications from them which fulfil all of our requirements.' Referring to the complaints about the amount of time it can get take to get licensed in Hong Kong, Mr Wheatley said 'reputable and experienced' hedge funds licensed in the US and Britain could expect to win approval three to four weeks after submitting applications to the regulator.