Yahoo! News – Singapore’s stock exchange is paving the way for the listing of hedge funds, the first major push in Asia. Singapore Exchange Ltd. (S68.SG), or SGX, released a proposed framework forlisting hedge funds last week, and expects to finalize the details after gathering public feedback until March 28.
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“With the expansion of the hedge-fund industry into a mainstream asset class and the increasing interest in Asian investments as part of a core portfolio, the listing of hedge funds willprovide the opportunity and platform for the growth of this product in Singapore,” an SGX spokeswoman said.
Indeed, hedge-fund assets grew to US$1.261 trillion globally in 2005 from an estimated US$254 billion in 2001, according to research firm Eurekahedge Pte. Industry experts estimate that assets were a mere US$40 billion in 1990. Unlike traditional funds typically limited to a single asset class and a fixed investment strategy, hedge funds can invest in any asset, anywhere in the world, utilizing investments and strategies with variable long and short exposures and degrees of leverage.
Among the proposed listing requirements, SGX plans to allow listed hedge funds to offer units only to institutions and accredited investors. The minimum asset size of a listed hedge fund should be S$20 million, or about US$12 million, if denominated in the local currency, or US$20 million or its equivalent if denominated in foreign currencies.
Listed hedge funds appeal to institutional investors and pension funds with strict mandates to invest only in listed securities, or those looking for safer alternative investments even if they aren’t bound by constraints.
