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

Change In 'Accredited Investor' Definition Could Hurt Crowdfunding Space

Jul 25 2014 | 8:14am ET

The Securities and Exchange Commission is considering changes to its 30-year-old...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note