Asia and Brazil funds catch up

Asian and Latin American cities are catching up with London and New York as locations for the world’s biggest hedge funds.

São Paulo and Rio de Janeiro between them are now home to five hedge fund managers each managing more than $1bn – compared with one 12 months ago, data due to be released on Wednesday will show.

The figures, to be published by Hedge Fund Intelligence, the industry’s biggest database, will underscore the extent to which hedge fund managers are keen to operate closest to the markets generating the biggest returns.Hong Kong and Singapore are now home to 15 billion-dollar fund managers, up from 10 at the beginning of the year.

New York remains in the top spot, home to 124 managers with more than $1bn each. It has slipped fractionally – the city accounts for 46 per cent of assets managed by billion-dollar managers, down from 47 per cent last year.

London, in spite of a spate of big fund closures, has seen its share of assets managed by billion-dollar managers increase, from 14.8 to 15.5 per cent.

The City’s share of the global hedge fund industry has doubled in the past decade but for the past few years its position has remained largely unchanged.

Fund managers say that investors’ growing interest in emerging markets is the main reason funds have moved to new bases. Investors also increasingly prefer to put money with fund managers that have an on-the-ground presence in the regions they trade.

As a result, Hong Kong is fast cementing a position as the industry’s next big centre. While the city is home to 10 fund managers running more than $1bn each, it also hosts a number of high-profile medium-sized funds likely to grow in the coming months.

Start-ups such as Janchor Partners – run by TCI’s former regional head, John Ho – are attracting significant interest. The fund has more than quadrupled in size to $200m in the past nine months.

Industry growth in Brazil is also expected to continue. Established US and UK hedge funds have earmarked the region for expansion.

London-based Brevan Howard, the world’s fourth-largest hedge fund, was recently revealed to be opening a new office in São Paulo, to be headed by the outgoing governor of Brazil’s central bank.

JPMorgan’s Highbridge, the world’s second-largest fund manager, is still in talks toacquire Brazil’s largest hedge fund, Gávea