“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.