Swiss-Asia starts new platform in Hong Kong for small hedge funds

Small hedge funds are joining services that help them cut costsas regulations tighten

PUBLISHED : Wednesday, 18 June, 2014, 1:19am
UPDATED : Wednesday, 18 June, 2014, 1:19am

Swiss-Asia Financial Services has started a hedge-fund platform in Hong Kong, adding to one in Singapore, to meet rising demand from smaller funds seeking to cut costs amid tighter regulations.

Omar Taheri, Swiss-Asia's business development manager, said two funds with assets under management of US$10 million to US$30 million were in the process of joining the Hong Kong service, which provides smaller managers with infrastructure, office space and helps them with their compliance requirements while allowing them to focus on investment decisions. The Singapore-based firm planned to add five funds in Hong Kong in 12 months, he added.

Hedge-fund managers with smaller capital are increasingly joining platforms which provide non-investment services to cut costs and comply with stricter regulations that require them to devote more time to administration tasks. Swiss-Asia had signed up seven managers in Singapore, Taheri said, with five starting this year. Another four were in the process of starting in the city-state, he added.

Mohammad Hassan, a Singapore-based analyst at data provider Eurekahedge, said starting on a platform allowed fund managers to "focus on their investment style while having risk management and fund administration at reduced cost".

"In particular, it is useful for smaller funds," he said.

Asia-based hedge funds oversaw a combined US$81.6 billion last month, according to Eurekahedge. In Singapore, 284 fund- management companies had US$15.4 billion of assets under management in March, compared with US$25.4 billion managed by 455 firms in Hong Kong.

Swiss-Asia already provided a similar service, run by a team of six, for its wealth-management customers in Hong Kong, Taheri said. He said he would be among those running the new hedge-fund platform.

The US Foreign Account Tax Compliance Act, enacted in 2010, increased hedge funds' requirements to be informed about US investors, while the European Union's Alternative Investment Fund Managers Directive asks managers to reduce organisational complexity and centralise management company activities. The Monetary Authority of Singapore introduced new regulations in 2012 which also affect smaller hedge funds.

"Being the biggest hedge-fund centre in Asia, Hong Kong is the right match to our existing platform in Singapore," Taheri said. "The advantage has become even bigger because of the new rules."