Elliott Management hedge fund closes its Hong Kong office

BOSTON (Reuters) – US hedge fund Elliott Management, known for its penchant for activism, is shutting down its 20-person office in Hong Kong after transferring responsibility for Asian investment decisions to London and Tokyo over the past three. years.

The 44-year-old firm told investors that the Hong Kong workforce would be relocated to London and Tokyo, a person familiar with the matter said Tuesday.

However, the closure of Hong Kong does not signal a change in investment priorities, the source said. Although the decision was made primarily for efficiency reasons, it coincides with growing political tension in the Asian financial hub.

Over the past three years, Elliott’s office has shrunk from about 100, with Hong Kong-based portfolio managers moving elsewhere, the source added.

In a rare example of shareholder activism, Elliott invested in Hong Kong’s independent Bank of East Asia (BEA), campaigning for reform, such as urging the bank to go on sale.

Last year legal proceedings between the two were suspended after the bank said it would review its business and later added that it would initiate a sale of its insurance business.

In Japan, as activist investments become more common, Elliott bought stakes and pushed for changes in companies like SoftBank Group Corp, hotel chain Unizo Holdings Co Ltd, and the now merged Alpine Electronics Inc. and Alps Electric Co.

Japan, like some other countries in the region, hopes to attract banks and asset managers from the former British colony after strict new security legislation prompted some companies to evaluate their operations there.

Few have publicly transferred operational staff after the new measure, however, and financial regulators in Hong Kong, which reverted to Chinese dominance in 1997, said it would not affect the companies’ operations.

Elliott’s move, first reported by the Financial Times newspaper, leaves her with offices in the United States, London and Tokyo.

Reportage by Svea Herbst-Bayliss in Boston, additional reportage by Alun John in Hong Kong and Makiko Yamazaki in Tokyo; Editing by David Goodman and Clarence Fernandez