SUBHEAD: A dozen hedge fund groups seek offices in Hong Kong and Singapore. the move to Asia fueled by new tax plans, more industry curbs in U.S. and Europe.
By Mary Linnane & Bei Hu on 18 January 2010 in Bloomberg News - (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agF8KhzNAr28)
Image above: "the Parade" by Mark Bryan (oil on canvas, 16"x20", 2001). From (http://www.artofmarkbryan.com/the_parade.html)
[IB Editor's note: This is some of the best news we have heard this week. I advise buying one-way-tickets, and as John Conner (in Terminator 2) would say "Hasta la vista, baby!"]
Bank of America Merrill Lynch is helping more than a dozen multibillion dollar international hedge funds set up or re-establish a presence in Hong Kong and Singapore as the US and Europe increase industry regulation.
A number of funds of hedge funds are also planning offices in the Asian cities, Dan McNicholas, head of Asia financing sales at Merrill Lynch said. Mr McNicholas spoke in a Bloomberg Television interview without mentioning any names.
Hedge-fund managers have been tempted by Hong Kong's regulatory environment, the region's economic growth and potential investment opportunities as US and Europe have proposed to increase taxes on the financial industry.
London Mayor Boris Johnson said that as many as 9,000 bankers may leave the UK capital's financial district as a result of a 50 per cent tax on bonuses announced last month.
'When you compare to New York or London, the business environment has been very friendly for managers,' he said. In New York and London 'you are seeing tax proposed and other restrictions on business that may make Hong Kong and Singapore attractive.'
Asia is also expected to absorb a larger proportion of global hedge fund inflows than it historically received as funds need to correct their under-allocations to the region, he said. More than 15 per cent of the US$50 billion to US$100 billion of hedge fund inflows expected in the first quarter may go to Asia, Mr McNicholas said.
Soros Fund Management and GLG Partners are among those planning a Hong Kong office, people familiar with their plans told Bloomberg last week.
'Unlike 2006, when we often just saw junior research staff and execution traders coming to Asia, we're seeing more senior staff choose to make the move,' said Mr McNicholas.
The UK last month imposed a 50 per cent tax on banks for bonuses of more than £25,000 (S$56,600). It is also raising taxes on residents earning more than £150,000 a year to 50 per cent from 40 per cent.
In 2008, it introduced a fee of £30,000 for non- domiciled residents who had previously escaped its tax system.
The European Union is preparing rules for hedge funds that would restrict the amount they can borrow and force them to use banks domiciled in Europe.
In the US, President Barack Obama proposed raising taxes on fund executives in his first Budget last year. An increase would affect general partners at buyout firms, hedge funds, venture capital firms and other partnerships including real estate, oil and gas investments.
Asian equities outperformed the US in 2009, with the MSCI Asia Pacific Ex-Japan Index advancing 68 per cent last year compared with the Standard & Poor's 500 Index's 23 per cent gain.
Asia is leading the world's emergence from its deepest recession since the 1930s after governments boosted spending, cut taxes and slashed interest rates.
China, South Korea, Taiwan, Hong Kong and 10 South-east Asian economies may expand 6.8 per cent in 2010 from 4.2 per cent last year, according to a report last month by the Asian Development Bank's Office for Regional Economic Integration in Manila.
Emerging markets will become a leading source of investment and credit as Western economies take longer to recover from the financial crisis, Tony Tan, deputy chairman of Government of Singapore Investment Corp, said yesterday at the Commonwealth Economic Forum in Taipei. GIC manages more than US$100 billion of the city-state's foreign reserves.
By Mary Linnane & Bei Hu on 18 January 2010 in Bloomberg News - (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agF8KhzNAr28)
Image above: "the Parade" by Mark Bryan (oil on canvas, 16"x20", 2001). From (http://www.artofmarkbryan.com/the_parade.html)
[IB Editor's note: This is some of the best news we have heard this week. I advise buying one-way-tickets, and as John Conner (in Terminator 2) would say "Hasta la vista, baby!"]
Bank of America Merrill Lynch is helping more than a dozen multibillion dollar international hedge funds set up or re-establish a presence in Hong Kong and Singapore as the US and Europe increase industry regulation.
A number of funds of hedge funds are also planning offices in the Asian cities, Dan McNicholas, head of Asia financing sales at Merrill Lynch said. Mr McNicholas spoke in a Bloomberg Television interview without mentioning any names.
Hedge-fund managers have been tempted by Hong Kong's regulatory environment, the region's economic growth and potential investment opportunities as US and Europe have proposed to increase taxes on the financial industry.
London Mayor Boris Johnson said that as many as 9,000 bankers may leave the UK capital's financial district as a result of a 50 per cent tax on bonuses announced last month.
'When you compare to New York or London, the business environment has been very friendly for managers,' he said. In New York and London 'you are seeing tax proposed and other restrictions on business that may make Hong Kong and Singapore attractive.'
Asia is also expected to absorb a larger proportion of global hedge fund inflows than it historically received as funds need to correct their under-allocations to the region, he said. More than 15 per cent of the US$50 billion to US$100 billion of hedge fund inflows expected in the first quarter may go to Asia, Mr McNicholas said.
Soros Fund Management and GLG Partners are among those planning a Hong Kong office, people familiar with their plans told Bloomberg last week.
'Unlike 2006, when we often just saw junior research staff and execution traders coming to Asia, we're seeing more senior staff choose to make the move,' said Mr McNicholas.
The UK last month imposed a 50 per cent tax on banks for bonuses of more than £25,000 (S$56,600). It is also raising taxes on residents earning more than £150,000 a year to 50 per cent from 40 per cent.
In 2008, it introduced a fee of £30,000 for non- domiciled residents who had previously escaped its tax system.
The European Union is preparing rules for hedge funds that would restrict the amount they can borrow and force them to use banks domiciled in Europe.
In the US, President Barack Obama proposed raising taxes on fund executives in his first Budget last year. An increase would affect general partners at buyout firms, hedge funds, venture capital firms and other partnerships including real estate, oil and gas investments.
Asian equities outperformed the US in 2009, with the MSCI Asia Pacific Ex-Japan Index advancing 68 per cent last year compared with the Standard & Poor's 500 Index's 23 per cent gain.
Asia is leading the world's emergence from its deepest recession since the 1930s after governments boosted spending, cut taxes and slashed interest rates.
China, South Korea, Taiwan, Hong Kong and 10 South-east Asian economies may expand 6.8 per cent in 2010 from 4.2 per cent last year, according to a report last month by the Asian Development Bank's Office for Regional Economic Integration in Manila.
Emerging markets will become a leading source of investment and credit as Western economies take longer to recover from the financial crisis, Tony Tan, deputy chairman of Government of Singapore Investment Corp, said yesterday at the Commonwealth Economic Forum in Taipei. GIC manages more than US$100 billion of the city-state's foreign reserves.
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