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New Managers February 2018

PERSPECTIVES: Investors see increased turnover and shorter life span of new hedge fund managers in Asia

 

Investors see increased turnover and shorter life span of new hedge fund managers in Asia

Asian hedge fund managers have seen tremendous growth particularly last year. However, one notable change in the region is the increased turnover of managers in Asia, said Theodore Qi Shou of Skybound Capital, a global asset manager specialized in alternative investment

Commenting on the issue of the opportunities for Asian managers at the latest Opalesque Hong Kong Roundtable, Qi Shou said it is very easy to track asset managers in Hong Kong because most fund managers or hedge fund-like family offices are required to secure a Type 9 license with the Securities and Futures Commission (SFC).

He told the roundtable, "We estimate that in the past the annual turnover among hedge fund managers that are registered and licensed in Hong Kong would be in the range of 15% to 20% per annum, meaning 15% to 20% of them will drop out and cease to be a licensed entity which pretty much means they are out of business, and usually about the same number of new or emerging managers come into play."

However, in most recent years, Shou noted that plenty of new managers have emerged and "they may come from anywhere that you can imagine."

He added that some of these new managers used to be prop traders, or head of sales or head of marketing at investment banks. There was even a former "head of IT" coming to launch a hedge fund. However, he said that the number of drop-outs remains high

Lifespan of new managers tend to be shorter

According to Shou along with the higher turnover, the lifespan of new managers tends to be slightly shorter now

When in the past, a manager who have had a tough first year or second year would have hung on and hoped to be able to grow out of this, but lately managers wer......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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