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Man set up standalone CTA trading team in Hong Kong
May 27, 2011 by Martin Leonard
The $71 billion asset manager Man Group has established a standalone CTA trading team in Hong Kong.
Man’s AHL division, its $22.7 billion quantitative managed futures manager, has bolstered the number of staff in its Hong Kong office from five to 11. The unit will cover 49 Asian markets and will trade approximately $4 billion daily.
“The AHL Asia desk will cover the Asian trading session with a seamless handover to a London team for the European open,” said Dave Wong, chief executive officer at AHL. “In the past two years, the Asia desk has reduced Asian trading costs by more than 20% and 98% of regional trading can now be processed electronically, with detailed analytics used to optimise the use of this capability,” he added.
Man, which has been in Asia for more than 15 years, has offices in Singapore, Tokyo and Sydney. Some 25% of its global funds under management are distributed in the Asia-Pacific. The firm has also recently expanded trading of several instruments including Asian stock index futures, interest rate swaps, relative value strategies and a number of Asian currencies.
Hong Kong and Singapore are fast becoming popular locations among some fund managers as European Union and US regulations start to bite. Many fund managers welcome the tough but constructive regulatory approach in these Asia-Pacific jurisdictions.
Hong Kong and Singapore have doubled their collective market share of billion dollar plus hedge funds over the last year, according to data from Hedge Fund Intelligence. There are now 18 hedge funds managing more than $1 billion of assets in these two regions (11 in Hong Kong and seven in Singapore) – up from 10 in 2010.
Reuters reported there are plans to launch a $750 million CTA hedge fund, Principia Capital Advisors in Hong Kong and Beijing. This is the second largest start up in Hong Kong this year following the unveiling of the $1 billion multi-strategy hedge fund Azentus Capital on April 1 by Morgan Sze, the former head of Goldman Sachs’ proprietary trading desk.
Asian-focused hedge funds posted steady gains during the first quarter of 2011, despite the volatility in the region’s markets. Capital invested in the Asian hedge fund industry increased by over $4.6 billion to approximately $88.1 billion, according to data from the Chicago-based Hedge Fund Research. This is the highest level since 2008.
Despite Hong Kong and Singapore’s ascendency, New York remains the main hedge fund centre with 128 billion dollar-plus hedge funds located there. London also retains a strong position globally – there are 63 funds, each with assets of more than $1 billion – based in the city. The Hedge Fund Intelligence report stated fears that London was losing its status were unfounded and it still remains the biggest hedge fund centre in Europe.
