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Alternative Market Briefing

Asian hedge funds joining 'platforms’ to bring down cost

Tuesday, July 05, 2016

Komfie Manalo, Opalesque Asia:

As the hedge fund industry struggles with crumbling 2-and-20 fee model, Asian fund managers are riding a new bandwagon by joining a "platform" to help them cut costs by taking care of everything from hiring staff to handling compliance, reported Bloomberg.

One such hedge fund manager is Hong Kong-based Ruhong Huang, who decided to join a platform when his fund’s assets reached $100m. Huang is one of the many Asian hedge fund managers who have been using the trend that allows them to save up to 90% of their yearly operating costs.

Huang of Credence Global Fund told Bloomberg, "The market has shown to be unforgiving of funds that lack strong operations. The costs and efforts of building out the institutional infrastructure to support a bigger fund add up very quickly and takes a lot of time." Credence Global has hired the services of a firm called Swiss-Asia Financial Services Pte., to take care some of its back office functions.

The report noted that many hedge funds are joining the shift as the industry is faced with a very challenging market environment, particularly dwindling returns and market uncertainties. Data from Eurekahedge showed that liquidations have outnumbered hedge fund launches this year as the rising regulatory costs have added to expenses. The volatile market has also added c......................

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