Whilst startup numbers are undoubtedly healthy for Hong Kong this year, with 65 per cent of hedge fund managers choosing to domicile there, the issue of capital raising remains prominent.PARA_BREAK_SENTINEL_9f8e7d6c

Whilst startup numbers are undoubtedly healthy for Hong Kong this year, with 65 per cent of hedge fund managers choosing to domicile there, the issue of capital raising remains prominent. On average, startup AUM is just USD10–13 million. Expansion, whilst vital to Hong Kong’s alternatives industry, is being superseded by fund evolution. Speaking to Hedgeweek, Des Anderson, a managing partner at Marshall Wace in Hong Kong, said there were no clear signs of consolidation at the moment, but it is likely the numbers would fall. “It will happen because there are too many,” said Anderson. “It will basically be survival of the fittest. The global funds moving into Asia might hire smaller startup teams to complement a bigger platform.” Anderson went on to stress that it’s not as if the smaller hedge funds with less than USD50 million are without hope, “they just have to stand out” and "there are many smaller fund of funds and high net worth individuals that will allocate to the start ups in search of outsized returns". He admits being unsurprised by the startup numbers because growth profiles in Asia are more superior to elsewhere in the world.