Honolulu Star-Bulletin – Hawaii is emerging as a focal point for Asia’s investors in hedge funds, the financial pools that have blossomed in recent years. London’s Financial Times reported this week that 10 hedge funds now operate in Honolulu and that figure could soon double, finding a welcome niche in the state’s diversifying economy. The growth should be encouraged by increasing security education and cutting red tape in the industry.
Initiated in the United States less than 60 years ago, the investment funds, unlike the more familiar stocks and bonds of mutual funds, are exempt from federal securities laws and charge high fees to professional investors and the wealthy. The $2 trillion industry embraces more than 9,000 hedge funds a year worldwide, estimated to be growing by 20 percent a year.
The Legislature passed a resolution two years ago supporting the growth of Asia-focused fund management. The resolution noted that the industry consumes no valuable natural resources, creates no harmful byproducts and requires no special infrastructure.
According to the Financial Times, Japan’s investment managers are tired of their country’s "slow and heavy-handed regulators." They are encouraged to move away from Japan for tax reasons but are reluctant to relocate to Singapore or Hong Kong. They are drawn to Hawaii by historical links, ethnic compatibility, comparatively low property prices, English as the main language, the ability of many residents to speak Asian languages, the islands’ laid-back lifestyle and, oddly, the 19-hour time difference.
