* Paulson received licence on Feb. 21 - records
* Fund manager has hired three former Morgan Stanley execs
* Paulson joins GLG, Soros making a beeline for Asia
* He made billions on investments during global crisis
(Recasts, adds China and Fidelity references)
By Nishant Kumar
HONG KONG, March 3 Hedge fund manager John
Paulson, who made billions of dollars from investments during
the global financial crisis, was awarded a securities licence in
Hong Kong, joining a rush of global money managers to the
The U.S. hedge fund manager, who bet on the collapse of the
U.S. subprime mortgage market during the crisis, joins the likes
of GLG and Soros Fund Management, which are making a beeline for
the high potential offered by the Asian alternative investment
Anyone operating in the financial markets in Hong Kong needs
the licence to deal in stocks, stock options, bonds and
collective investment schemes.
Fund tracker Eurekahedge says Asia is the fastest growing
region in the world for hedge funds. It projects about $40
billion will be added in 2011 to current assets of $125 billion,
underlining the attraction of the region to global players.
"The establishment of material regional presence by the
major global hedge fund complexes continues and these
investments are cause for optimism for the sector locally," said
Harvey Twomey, head of prime finance sales, consulting and
capital introductions in Asia Pacific for Deutsche Bank.
The news also follows the setting up of high-profile
start-ups, such as a $1 billion-plus fund planned by former
Goldman Sachs' trader Morgan Sze and the founder of Tiger
Management, Julian Robertson, who is backing the Nezu Asia fund.
Surging local wealth in Asia Pacific, where more than three
million people are millionaires, will also find its way into
LURE OF CHINA
Paulson, whose bet the American mortgage market would
implode made him one of the world's wealthiest people, was
awarded the Hong Kong licence on Feb. 21 for his company Paulson
Asia Ltd, records of territory's Securities and Futures
Other big industry names such as Moore Capital, Maverick
Capital and Viking Global Investors are also eying the region as
a major destination for growth in future, especially given its
proximity to China.
"There is sound logic for new managers to look at Hong Kong
currently with its strong regulatory infrastructure and
proximity to the Chinese market," Colin Lunn, head of business
development, Asia-Pacific, for HSBC Securities Services.
"These high-profile new entrants can only be good for the
Hong Kong maintained its number 1 position as Asia's top
destination for hedge fund managers in 2010 with the launch of
57 new funds that collected $2.4 billion, data from industry
tracker Asia-Hedge shows.
Singapore, in second place, had 15 new fund launches and
collections amounting to $673 million, the data shows.
New hedge funds focused on China were most in demand.
Mutual fund giant Fidelity is actively preparing to enter
China by securing a trust company licence in one of the world's
fastest-growing asset management markets, a source told Reuters
Fidelity's star manager Anthony Bolton is well known in
China. Last week, Bolton's Fidelity China Special Situation Fund
wrapped up a share offering, raising its targeted
proceeds of 166 million pounds ($269 million), more than a third
of which came from new investors.
Paulson, who earned an estimated $5 billion in 2010 mainly
through bets that the U.S. economy would recover, has hired
Xiaoli Deng, Sandra Lee and Winnie Wong, formerly with Morgan
Stanley , for roles in his company's Hong Kong operations,
the commission records show.
About a fifth of 100 leading institutional investors in
hedge funds surveyed by alternative assets research firm Preqin
expressed an improvement in their levels of confidence in hedge
funds in 2010, with nearly two-thirds saying Asia would present
the best opportunity in 2011.
(Editing by Chris Lewis and Muralikumar Anantharaman)