Chicago-based Tremont Capital Management is setting up shop in Hong Kong in order to target Asian private banks and institutional investors for its fund-of-hedge-fund products, says Billy Cheung, director of the firm's Asia division.
As part of this business strategy, the firm is also in the process of applying for an investment advisory license from the Hong Kong Securities and Futures Commission. Cheung says the firm has no plans at this time to target the retail segment in Hong Kong, but that Tremont would rather be prepared should it see an opportunity later. It may also apply for a similar license in Singapore to access sophisticated investors.
Tremont sees Hong Kong, Singapore, Taiwan and South Korea as the most attractive opportunities for its segregated accounts business. Cheung, who joined the firm in the summer from rival Gam, says Tremont is known for customizing its business. "There's no such thing as an all-weather hedge fund product for institutions," he says.
Taiwan and Korea are especially attractive as their regulatory regimes gradually become more hedge-fund friendly. Taiwan's new private placement law does not allow for investments into hedge funds, but the regulators are working on widening the scope in 2006.
In addition, Tremont will use the new presence in Hong Kong in order to research hedge fund managers for its global funds of funds. The firm doesn't have a pure Asian fund of hedge funds, although it could customize one for a client, Cheung says.
Japan offers the biggest institutional market for hedge funds in the region, and perhaps the world, but Tremont opted to start in Hong Kong because it can leverage the growing platform of its immediate parent, OppenheimerFunds, and its 'grandparent', MassMutual Financial, a Boston-based insurance company. MassMutual also owns Baring Asset Management.
Cheung spent four years at Gam's regional business development desk, and has also worked at Franklin Templeton and JF Asset Management, all in Hong Kong.
Tremont is best known for its joint venture with CSFB, which provides a series of US and global hedge fund indices. Tremont's founder, Sandra Manzke, left early this year to set up a new company, Maxam Capital Management, which is now providing Asian hedge fund indices in partnership with Eurekahedge in Singapore.