Hedge funds flee HK

What’s that deep rumbling, coughing sound? Hong Kong's worsening air pollution is prompting a number of hedge funds to move to Singapore, in a trend that could undermine the competitiveness of the territory's financial sector.

Senior execs at Morgan Stanley and Goldman Sachs, the world's largest providers of hedge fund broking services, say health and lifestyle issues are causing rifts at the top of a growing number of Hong Kong-based funds, most of which are owned and operated by mid-career professionals.

Some industry experts believe the departure of highly mobile hedge fund managers reflects a growing trend that has also started to affect traditional fund management groups.

According to headhunters, several Hong Kong-based chief investment officers of big international fund houses are exploring job opportunities in Singapore's relatively small mutual fund industry.

Ed Peter, head of the Asian operation of Deutsche Asset Management, recently moved from Hong Kong to Singapore, said lifestyle was among the three most important factors driving the expansion of the group's Singapore hub. "Many of those who have recently joined our Singapore operation are saying: 'I don't want to expose my children to the smog in Hong Kong'."

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