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12 | International location
© Jojojojo © Mikekwok
I then considered Hong Kong, a supremely hedge fund managers are aged between early 30s starts its Monday morning. It closes at midnight
exciting city and a very vibrant place to work. and mid-40s and have relatively young wives on Friday, Dublin time, when Chicago goes
However, it was very much more expensive than with relatively young children. When Mrs. home for the weekend. Thus, it can offer a 24/5
Singapore and although I was not hindered or Manager wakes up on a Wednesday morning and service to its clients. For daily dealing funds, this
obstructed by anybody in the Government, or cannot see Kowloon from their apartment on the means that, providing we can get the data from
the Regulator, they also did not seem particularly Peak, she has good grounds for demanding a the Fund’s brokers, we are able to capture all the
interested in the fact that we were considering change. Mr. Manager is then given an ultimatum trades and reconcile and price the Fund’s posi-
opening an operation there. that either he moves with Mrs. Manager and tions in Singapore, before rolling the book to
When I went to Singapore I found an entirely their two little baby Managers to Singapore, Dublin and Chicago where the NAVs are calcu-
different situation and atmosphere. Apart from where the environment is very much more eco- lated. Chicago then reports the numbers to the
being a less expensive zone in which to operate, friendly, or she will return to Fulham or client at 3.30pm on T+1. We currently provide
the Singapore government and the Monetary Connecticut, with the kids. Mr. Manager may be daily dealing NAVs for over 100 funds, including
Authority of Singapore, in particular, were very a very hard-nosed dealer, but this is a battle he sub-funds, which is more than 25% of all the
pro-active and keen to meet and encourage us to will never win. So we have seen a relatively large funds and sub-funds that we administer. I believe
set up. This was a pleasant change from the immigration of hedge fund managers from Hong this is almost unique in the industry. We would-
ambivalent attitude of the Hong Kong authori- Kong to Singapore. n’t be able to do it without the Singapore office.
ties. Furthermore, I felt – and this is a personal This has also been accompanied by a migra- Like everywhere else in the world, Singapore
opinion – that, politically, Singapore was more tion of Japanese managers who, I understand, has suffered from the current financial debacle
stable than Hong Kong. The Chinese were escaping a somewhat complex tax structure and economic downturn. Nevertheless, we envis-
Government has, on more than one occasion, in Japan. Although that may have been resolved age that hedge funds will grow over the next year
shown that they are capable of changing the by recent changes in local legislation, the trend or so. After all, on average they produce circa
goalposts without any consideration for their has started. The influx of managers and adminis- 15/20% Alpha, although there may not be much
expatriate supporters. I also found that the trators in Singapore did, for a while, push up seen before the third quarter of this year. We
education of potential staff in Singapore was costs, but still not enough to put people off. The expect that, after a short period of reflection, we
much more focused, as were the staff themselves. recent decline in the property market has helped should be back on the growth path – but who
As an administrator I found this immensely substantially. knows?
attractive. From Custom House’s point of view, having A final anecdote - an example of why I consid-
We opened in Singapore in April 2007 and an office in Singapore has proved absolutely er Singaporean staff to be impressive. We had a
when I went back to Hong Kong at the begin- invaluable. The original idea of opening this candidate for a job who had been placed third in
ning of 2008, I was struck and appalled by the office was to capture local South East Asian Singapore in the ACCA exam, and 8th in the
incredible pollution. This made me even more hedge fund business. That didn’t actually start to entire world. This meant that there are two other
pleased that we had selected Singapore. I under- happen for at least 18 months, because all the people in Singapore who were in the top seven.
stand that the majority of the pollution stems staff – and we now have over 60 - were initially Even more surprising, this individual, when
from factories on the mainland, many of which focused on serving our daily dealing funds. This offered an administration job, asked if he could
are funded by and producing products for Hong we were able to do because the Custom House start in “Reconciliations”, so that he could under-
Kong companies. Perhaps Hong Kong has creat- offices in Singapore, Dublin and Chicago all stand what everybody was doing from the
ed its own problem in this respect. It has certain- work off the same system (PFS-PAXUS) and thus ground up. A very old-fashioned approach,
ly had a dramatic effect on hedge fund managers each office can speak to the other electronically. which I applaud. It is not an attitude we have
emigrating from Hong Kong to Singapore. In effect, Custom House’s office opens at mid- experienced recently in Dublin, although those
This is because the majority of successful night on a Sunday, Dublin time, when Singapore days may return.
March 2009 Investment International www.investmentinternational.com
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