If you want to start a hedge fund, there are a lot of decisions to take into consideration. Aside from the points we cover in our How to Launch a Hedge Fund seminar, where you start your hedge fund also tops the list.
According to HedgeTracker.com’s list of “Top Hedge Fund Firm Launches of 2010”(and keeping in mind the year is not quite finished), 20 out of the top 40 are located in the US, followed by 10 in Asia, seven in the UK, and one each in Canada, Switzerland and Australia. As for top cities, New York is home to 14 of the top hedge funds launched so far this year with London in second place at 6, closely followed by Hong Kong and Singapore. With increased hedge fund regulation in the US and Europe however, we could see a significant shift in these numbers by the end of the year as we start to see considerable growth in less regulated territories such as Asia.
Currently, Singapore is the most appealing Asian country as its central bank recently voted against hedge fund licensing requirements, and Bloomberg reported that seven hedge funds launched in May and June alone. According to FINalternatives, China is preparing for the launch of its first official hedge fund, E Fund Management, after easing restrictions and it looks like more will follow with the launch of China Southern Fund Management. As for Hong Kong, it is more restrictive than Singapore as hedge fund managers have to follow the same registration requirements as mutual fund managers, but many are still taking advantage of the $1.7 trillion dollar hedge fund gold mine
While US and European hedge fund regulations might make people think twice about where to start their hedge fund, there is still a lot of opportunity to be had no matter where they end up. With four months to go before the end of the year, however, it will be interesting to compare the start-up locations on HedgeTracker.com’s final 2010 list vs. 2009. Whatever the outcome, we should definitely be keeping an eye on Asia.