Hong Kong Jockey Club Bets on Hedge Funds

HONG KONG – As reported by Bloomberg: "The Hong Kong Jockey Club, the Chinese territory's only legal gambling forum, is raising its bets on hedge funds.

"The club, which leads investing trends in Hong Kong, has amassed $164 million in the loosely regulated funds since 2002 and is looking for more, said Treasurer Jacob Tsang. Its holdings beat the 21.7 percent return of the HFRI Fund of Funds Composite Index between 2002 and June 30, 2005, the end of the club's latest financial year, he said.

"…Hong Kong relies on the club, founded by British colonists in a drained malarial swamp they named Happy Valley, for 10 percent of taxes and about $130 million in charitable donations each year. Deng Xiaoping kept the club's business legal after the 1997 handover of Hong Kong to mainland China, where gambling is banned, and last year it took in $12.4 billion in horse racing, soccer and lottery wagers.

"The club's investment decisions spur other organizations to follow suit, said Naomi Denning, head investment consultant for the Asia-Pacific region at Watson Wyatt Worldwide Inc. in Hong Kong.

"…The third-largest institutional investor in Hong Kong, the club was the first to diversify into hedge funds, Denning and Tsang said.

"…The team is adding property and more hedge funds to its long-term investments. It's considering introducing these alternative assets to the $2 billion managed in the charity trust, Tsang said. His team studied hedge funds for two years before making the first investment in early 2002…"