Modular Asset Management Expands into Hong Kong Amid Geopolitical Tensions and Competitive Financial Landscape

Modular Asset Management, a hedge fund based in Singapore and a spin-off of Millennium Management, is preparing to expand into Hong Kong, a move that highlights the city’s continued efforts to strengthen its position as a global financial hub, as reported by Bloomberg.

Managing $1.5bn and specialising in macroeconomic strategies, Modular has appointed former Barclays trader Alex Hu Xiuyi as a portfolio manager. Hu’s appointment marks the first recruitment for the firm’s new Hong Kong office, set to open in the second quarter of the year, according to a source familiar with the plans.

The new office is strategically located to bring Modular closer to the Chinese market and to attract finance professionals who prefer to remain in Hong Kong, the source added, speaking on condition of anonymity. This move also reflects a broader trend of firms establishing a presence in the city to tap into the growing demand for financial services in Asia.

This expansion comes amid rising geopolitical tensions and China’s slowing economic growth, both of which are reshaping the global market landscape. Macro hedge funds, which invest across various asset classes, including equities, fixed income, currencies, and commodities, are navigating a more divided global economy, driven in part by the ongoing US-China rivalry. The ongoing trade conflict between the two superpowers, along with heightened scrutiny of Chinese firms, has made it increasingly important for hedge funds to adapt quickly to changing market dynamics.

In recent months, the Biden administration added Chinese tech giant Tencent Holdings and the supplier of Tesla batteries, Contemporary Amperex Technology, to a list of companies accused of having ties to China’s military. Meanwhile, China’s central bank has ramped up its bill auctions in Hong Kong to record levels in an effort to stabilise the yuan, amid heightened concerns surrounding potential economic policies from a possible second Trump presidency. On the campaign trail, Trump has repeatedly advocated for tariffs, including threats of up to 60% duties on Chinese goods.

Hong Kong faces increasing competition from financial centres in Singapore, Tokyo, and the Middle East as it strives to rebuild its appeal after experiencing a talent exodus during the Covid-19 pandemic, China’s regulatory crackdowns, and ongoing geopolitical challenges. However, recent data shows signs of recovery: between July and October, Hong Kong’s securities regulator registered a net increase of around 830 newly licensed financial professionals, bringing the total number of licensed individuals to a record 42,000. The increase in financial professionals highlights the resilience of Hong Kong’s financial services industry, which continues to attract both local and international talent despite the challenges.