As China continues to expand as an economic contender on the world financial scene, hedge funds are becoming more prevalent as a financial instrument for many investors there. As such, China is now beginning to establish Shanghai as a powerful financial center and a headquarters for the sprouting hedge fund industry.
So far growth is steady as several dozen hedge funds are making plans to set up their primary offices in the northern district of Shanghai known as Hongkou. Most of the firms are local, and they will be getting incentives to establish their offices here, such as tax, rent and other benefits. China would like to see Hongkou become Shanghai’s hedge-fund park, according to Kenny Li, the CEO of asset manager KKM Capital.
KKM Capital is one of the hedge fund firms helping the government set up resources which will help the funds establish themselves successfully. The first offices will be housed in the 47-story skyscraper Citic Plaza while other firms will expand into the surrounding neighborhood as they make their homes in the area.
“The idea is for Hongkou to become like Mayfair in London, or midtown in New York,”said Bartt C. Kellerman, the organizer of “Battle of the Quants,” a conference for international hedge fund managers.
The conference will be held in Hongkou this coming November as a kick-off event for the area.