Singapore Hedge Fund Shop Dumps China

Feb 2 2010 | 10:01am ET

China may be one of the fastest-growing regions in the hedge fund industry, but that isn’t stopping one Asian hedge fund consultancy and advisory from washing its hands of the country.

Singapore-based GFIA has stopped covering and investing in hedge funds based in mainland China. In its monthly report, the firm said it believes “there is no internalized culture of business or fiduciary ethic in the People’s Republic of China.”

“For the time being,” the report added, “we doubt this will change.”

The move ends more than five years of hedge fund research in China for GFIA, which has also sold or redeemed all of its investments with mainland hedge fund managers, Bloomberg News reports. At their peak, GFIA’s China funds managed $3 million, or 10% of its total portfolio, according to principal Peter Douglas.

Douglas said his firm has moved its focus to Hong Kong-based hedge fund managers with experience outside of Asia. He added that the firm currently favors managers in more transparent regions, such as India and Latin America, particularly Brazil.

“A hedge fund is really all about the people behind it, and less about where the firm is, the structure, and all the rest of it,” Douglas told Bloomberg. “The problem is there is no deep culture of openness and transparency in China. If you’re running a more qualitative risk-management approach, you really need a breadth of qualitative information.”


In Depth

Q&A: Filippo Pignatti Morano On The Ultimate Alternative Investment...Classic Cars

Jan 29 2015 | 12:37pm ET

In 2011, Filippo Pignatti Morano launched a fund to invest in classic cars. FINalternatives...

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note