The Hong Kong Jockey Club is one of that city's most staid (and oldest) institutions, but even it is not immune to change when it comes to hedge funds.
The club has become the latest investor to move into hedge funds directly, eschewing funds of hedge funds and their added layer of fees. The first two funds to claim the HKJC as a client are Och-Ziff Capital Management and Millennium Management.
"It is the first time the club goes direct and there is room to add more direct managers in the future," the director of the club's group treasury, Jacob Tsang, told Bloomberg News. "This move signifies a shift in paradigm as the club moved forward to a more efficient way to deploy capital."
According to Tsang, the club did its own due diligence in selecting Och-Ziff and Millennium, and did not use a consultant. He added that the HKJC has previously invested in one of the two managers through a fund of funds.
In addition to serving as one of Hong Kong's most exclusive social clubs, the HKJC also holds a monopoly on horseracing and much gambling in Hong Kong. It has about HK$9.2 billion (US$1.2 billion) in assets invested in alternatives.