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

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...