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Graphic shows hedge fund assets under management in Hong Kong, Singapore, Japan and Australia.


Hong Kong hedge funds under threat

By Duncan Mil

June 9, 2020 - Hong Kong-based hedge funds are considering moving their operations after Beijing approved controversial national security legislation that will permit China’s secret police to operate in the city.

The Chinese Communist party’s plan to impose laws targeted at what it called “subversion of state power” or “interference” from foreign countries threatens Hong Kong’s status as the premier destination in Asia for hedge funds.

According to data from research firm Eurekahedge, there are 546 hedge funds based in the city, compared with 334 funds in Singapore, the regional runner-up.

Funds in Hong Kong manage assets worth more than US$92 billion, almost as much as in Singapore, Japan and Australia combined.

“We are a very free society, so for the time being, people have the freedom to say whatever they want,” Carrie Lam, Hong Kong’s chief executive, told reporters in Beijing.

Critics argue that Beijing’s security bill will side-step Hong Kong’s legislature, and end the “one country, two systems” principle that has protected the city’s status as a global financial hub.

Global bank, British-based HSBC, has backed Beijing and the billionaire class of real estate developers and moguls who dominate Hong Kong’s economy have also supported the controversial law.

One of the law’s staunchest opponents is media tycoon Jimmy Lai, who has called out his fellow richest people for kowtowing to Beijing.

“This is the death knell for Hong Kong and everybody in business,” said Lai. “Without the rule of law, there will not be protection for people who do business here,” he added.

PUBLISHED: 09/06/2020; STORY: Graphic News; PICTURES: Getty Images