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Opalesque Exclusive: China hedge funds` performance mostly from long side, Why trading a China book from London or U.S. won`t work, Hedge fund managers` current China plays Matthias Knab reports from the gaimAsia conference in Hong Kong: As the rising tide lifts all ships, China hedge fund managers confirmed they created most of their returns from the long side. Ted Chen from Greenwoods (which runs the Golden China Fund out of Hong Kong) pointed out that shorting offers limited opportunities currently and it is costly. Fang Zhang from Keywise Capital said the advantage of a hedge fund is having the liberty to follow a “free-style”, not benchmark-oriented investment style. Xin Hunag from Persistent Edge Management, whose FoF recently won a price in the Asian equity category, added that however different markets offer different instruments; for example an increasing number of companies have now a foreign listing (London AIM, USA and recently even Frankfurt).

Barriers to entry Moderator Kate Colchester from Eurekahedge pointed out that China would be the 2nd most expensive country in the world to trade. The hedge fund managers said over time the costs will come down, also driven by retail participation.

Demand for China hedge fund would be high; however there are some barriers to entry, foremost the shortage of talent and lack of connections. George Lin from Telligent tells that sometimes large global funds would give a “certain percentage of ......................

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