Although it might seem odd, the more positive stance taken by Hong Kongs regulatory authorities during the credit crunch could well act as a draw for hedge fund managers presently headquartered in Europe and the United States. As one foreign-based manager points out: Asia offers better opportunities to develop a premium money management operation than the US, for example, where there are many more established players.
Louis Gave of Gavekal concurs. Despite the financial tsunami that has hit the industry, we remain very bullish on the longer-term outlook for Hong Kong. The last bull market was only three to four years long here, whereas it was 17 years in Australia. There is little excess leverage in Asia. Hong Kong is certainly feeling the ripple effects of the leverage crisis in the West, but it remains structurally strong and has an ability to adapt quickly.