Seth Fischer Oasis & Other Funds Take Hong Kong By Storm

Hong Kong’s hedge fund world is fast taking center stage on the financial scene. In December of 2007 at the 5th Annual Hedge Funds Conference, Secretary for Financial Services & the Treasury, Professor KC Chan said that he thinks Hong Kong is becoming the hedge fund hub of Asia. He quoted figures that showed that the hedge fund presence in Hong Kong has moved from about 160 funds in 2001 to about 1240 in the first half of 2007.

As he said, “Hong Kong got the largest number of new Asia Pacific hedge funds launched in 2006 as well as in the first half of 2007, ahead of Singapore, Japan and Australia. We have adopted various tax measures to promote the growth of the industry. Since 2006, offshore funds have been exempted from profits tax. This brings us in line with other major financial centres such as New York and London. More importantly, the measure helps attract new offshore funds to come to Hong Kong and encourages existing offshore funds to continue to invest in Hong Kong.”

As he continued, “We have also abolished estate duty since last year to encourage local and overseas investors to invest in Hong Kong. To further enhance our competitiveness, the Chief Executive announced in his Policy Address in October this year that our profits tax will be reduced from 17.5% to 16.5% in 2008-09. Given our already low and simple tax regime, these measures will further enhance our attractiveness to overseas fund managers.”

Hong Kong: a Global Center for Hedge Fund Activity

Hong Kong has increasingly become a power house in the financial world, and with good reason. Many hedge fund managers, like Seth Fischer Oasis Investments Limited, use Hong Kong as their base of activity.

A survey released by the Securities and Futures Commission (SFC) in March 2011 confirmed this growth of activity. Entitled “Report of the Survey on Hedge Fund Activities of SFC-licensed Managers/Advisers,” it shows that assets under management or advisory in Hong Kong increased 14% from March 2009 to September 2010. The number of hedge funds that are managed by SFC-licensed hedge fund managers in Hong Kong also grew tremendously. While it stood at 538 in September of 2010, it was five times the level in 2004.

By September 2010, the survey pinpointed that 66.1% of the total assets under management were invested in the Asia Pacific markets and 92% of the investors were from overseas.

As Martin Wheatley, the SFC’s Chief Executive Officer explained, “Closer scrutiny of the hedge fund industry is a global trend. We will continue to maintain a balanced approach to regulation with a view to allowing room for industry development and growth without compromising investor protection.”