Man Investments plans retail fund of hedge funds in Hong Kong

Man Investments plans to launch a retail fund of hedge funds in Hong Kong in the third quarter of this year, which it hopes will raise $50 million in the first 12 months.

Matthew Dillon, regional manager for the Asia-Pacific region at Man Investments in Hong Kong, said the company has received approval from the territory’s securities regulator, the Securities and Futures Commission (SFC), to launch the product, which will be an open-ended, multi-manager multi-strategy fund. The company currently has an open-ended single-manager, single-strategy fund called AHL Diversified Futures, which has raised $580 million in cumulative subscriptions in Hong Kong since launch in April 1998.

“We are targeting to raise $50 million in the first year for the new fund. It’s hard to compare it with the AHL Diversified Futures fund, which is a single-manager, single-strategy fund,” said Dillon.

Just 12 funds have been approved since the SFC released its regulations on retail hedge funds in 2002, and Hong Kong’s retail investors have so far been wary of hedge fund investments amid a continuing perception that the asset class is high risk. Dillon noted that the growth in variety of hedge fund products and strategies has made investor education a key focus in launching retail products for Hong Kong investors.

“Hedge funds are often viewed as black box investments because they do not normally publish the details of their positions and give only limited insight into their trading strategies... This lack of transparency has often led investors to assume that hedge funds are inherently risky. This is not the case,” he said.