Hong Kong has suffered a torrid 18 months. A year of riots was followed by a pandemic and, most recently, Beijing’s move to impose a new national security law.
Many experts have called time on a fascinating, freewheeling, and above all fun city. It was, they said, the beginning of the end. Beijing would undermine the legal system – a key reason why banks and investors trust the place – at will and at whim.
Hedge funds would flee to Tokyo or, more likely, low-tax Singapore, which would also mop up the city’s private banking industry. And heaven help banks like HSBC, reliant on profits generated in Hong Kong and mainland China, caught in the crosshairs.
But are things really so bleak?
In truth, it’s hard to see Hong Kong losing its status as Asia’s chief hedge fund hub. Eurekahedge reckons 420 such funds are based in the city, managing assets of more than $90 billion – or more than Singapore, Japan and Australia combined.
At least six hedge funds opened new offices in Hong Kong in the first half of 2020, Jack Inglis, chief executive of the Alternative Investment Management Association, tells Euromoney.