National security law: Hedge fund guild says don’t write off Hong Kong as a finance hub as new firms continue to set up

At least six hedge fund managers have set up shop in Hong Kong this year, according to the Alternative Investment Management Association

Although some Hong Kong firms are seeking licenses to expand in Singapore, they aren’t abandoning their home base, said Jack Inglis, chief executive officer of the group

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A general view of Victoria Harbour, taken from The Peak on Hong Kong Island on 13 July 2014. Photo: SCMP

Published: 3:57pm, 12 Jun 2020Updated: 3:57pm, 12 Jun 2020

A hedge fund industry group says Hong Kong continues to attract new firms, downplaying speculation that money managers are fleeing the city over China’s attempt to enact a national security law in the city.

At least six hedge fund managers have set up shop in Hong Kong this year, according to the Alternative Investment Management Association. Although some Hong Kong firms are seeking licenses to expand in Singapore, they aren’t abandoning their home base, said Jack Inglis, chief executive officer of the group.

“While the anticipated new security laws undoubtedly give rise for concern, it is far too early to predict an end of its hedge fund industry,” Inglis wrote in his regular update to members on Thursday. He added that Hong Kong remains the largest centre for hedge funds in the Asia-Pacific region.

Hong Kong saw months of social unrest from the middle of last year as pro-democracy protesters clashed with police, disrupting businesses and tourism. Tensions have risen further over the proposed security law that opponents say could curtail essential freedoms in the former British colony that returned to Chinese sovereignty in 1997 under the “one country, two systems” promises.

The London-based industry group, whose 2,000 corporate members manage more than US$2 trillion in hedge and private credit funds, rarely wades into politics. Inglis’s comments echoed those of others who say that the industry has taken a more nuanced approach to the issue.

“The details of the new security laws are not yet known, and our Hong Kong members are telling us they are taking a wait-and-see approach,” Inglis wrote. “It would never be an easy decision to relocate.”