November 26, 2006

The Asian Hedge Fund Scenario

-- By Pushpa Sathish, Staff Writer

Be prepared for the explosive growth of hedge funds in Asia, says Jean Pierre Bernard, the regional head of BNP Paribas for Southeast Asia and India. He predicts, that at the present annual growth rate of 35 percent, they will double over the next three years from their current value of $130 billion.

Amidst all the controversy and confusion regarding the impact of hedge funds on the financial markets, Bernard says they are not detrimental, and that they add liquidity to the market, IF they are regulated properly. Singapore follows a different path from the United States and regulates its hedge funds, he adds. Bernard is the chief architect of the (Singapore)$1.4  million Hedge Fund Center at the Singapore Management University, set up jointly with the London Business School in an attempt to boost the standing of hedge funds in the region.

The Asian hedge fund scene is still in the fledgling state when compared to the worldwide markets, but there is potential for growth as the Asian markets deregulate, according to Ong Chong Tee, the deputy director of the Monetary Authority of Singapore.

Contradictory statements indeed! Should the Asian hedge fund industry grow because of deregulation or should the financial markets be stabilized by regulating the funds that do set up shop in the world’s largest continent?

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