Philip Tye, the newly appointed chairman of the Hong Kong chapter of the Alternative Investment Management Association (Aima; day job: managing director of DragonBack Capital), says the hedge fund industry it represents needs to coordinate at a regional level.
One of the objectives of Aima Hong Kong will be to coordinate with its brethren in Singapore, Sydney and Tokyo. He is working on cross-border communication along with two other Aima council members, Chris Pearce, COO of Marshall Wace in Hong Kong, and Mark O’Sullivan, a partner at Ernst & Young in Sydney.
“We all face similar challenges,” Tye says, noting that the groups can share information on how hedge fund companies are dealing with regulation or trying to gather assets.
The three-man taskforce also sees benefits in ensuring local chapters sing from the same song sheet when it comes to holding conversations with their regulators, and encouraging Asian authorities to also speak with one voice in global forums such as Iosco (a group for securities regulators).
“At least we can get a common story when we’re dealing with issues such as AIFMD,” Tye says, referring to the piece of European regulation.
Regional coordination is one of three main parts of Tye’s agenda at Aima. Second is to help the industry in mainland China open its own chapter.
Florence Yip, vice-chair of Aima and a partner at PricewaterhouseCoopers, is heading a group within the executive committee to gather interested parties in Beijing, Shanghai and other cities.
As occurred with Aima’s early days in Hong Kong, Tye expects a mainland China version to be populated at first by service providers: custodians, administrators, lawyers, accountants and prime brokers. But eventually it will attract local hedge fund managers, too.
“We aren’t going to put this together for them, but Aima Hong Kong can act as a kind of sounding board,” Tye explains, adding that now is a good time to bring the mainland industry together as Chinese authorities look to liberalise investments further, such as promoting shorting and securities lending. “Let’s start a dialogue with the regulators about international standards and best practices,” he says.
Thirdly, Aima Hong Kong will continue to look to its own market, where the government is keen to solidify Hong Kong’s role as a financial centre.
The government is organising a new Financial Services Development Council, and in June charged former vice-chairman of the China Securities Regulatory Commission and current director at HSBC Holdings, Laura Cha Shih May-lung, to head the preparatory taskforce to get it off the ground.
“This is exciting for alternative investment managers,” Tye says, noting the council could lead the way towards, say, a Greater China passport system for funds, including hedge funds. It may also smooth the way to make Hong Kong an attractive domicile for hedge funds, in terms of taxes and other rules, giving the industry an alternative to the Cayman Islands, Dublin or other centres.
Finally, on a more quotidian basis, Oscar Wan of LIM Advisors has been named chairman of the managers group within Aima HK, a discussion forum for member hedge fund managers with regard to a broad range of issues, including investor education, regulation and advocacy.