The Securities and Futures Commission of Hong Kong has approved three hedge funds for the retail market, two single strategy funds and one fund of funds. JF Asset Management has received approval for its JF Asia Absolute Return Fund and the JF Greater China Absolute Fund. A fund of hedge funds from HSBC is the third product to receive approval. The HSBC Republic Alternative Investment Portfolio is the name of the product and the sub-fund is the HSBC Republic Global Strategy Hedge Fund.

Commenting on the approvals, Paul Smith, head of global fund services worldwide of Bank of Bermuda, says, "We are delighted that the SFC has set the framework for the alternative investment sector. This will further enhance the growth of the hedge fund industry in Hong Kong. As expected, the first approved retail hedge funds in the market are fund of hedge funds and single hedge funds.

"As we understand it," he adds, "retail investors do not have as much experience in the alternative investment agenda, therefore fund of hedge funds are an excellent entry point. When investors become more familiar and thus more confident, we expect they will consider other hedge funds options which we are sure the marketplace will deliver."

The approval committee of the SFC is due to meet again this month and could result in further hedge funds being authorised for the retail market.