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Emerging markets and emerging tech remain the focus for Hi2

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Jerry Wang, CEO of Hi2 Investment Management, chats to Hedgeweek/Private Equity Wire about some of the current challenges and opportunities in the private credit space including anti-globalisation trends and the impact of artificial intelligence…

What are the greatest risks facing both your business and your clients at present?

With inflation tamed and interest rate hikes turning around, the biggest risks we are facing are geopolitical tensions in Asia, Europe and Middle East, nationalism and anti-globalisation trends in major economies, and regulatory uncertainty in the US and developing countries. We are doing our best to stay away from political conflicts, under-allocating to countries not participating in re-globalisation after the global pandemic, and building up a compliance team to comply with new rules and regulations.

Where do you see the most significant opportunities for growth in the coming year?

Since the firm was first founded, we have always believed in emerging markets and emerging technologies. Many of the emerging economies we invest in are younger, more stable and growing faster than the rest of the world. Emerging technologies, such as artificial intelligence, genetic engineering and nanotechnology are changing our world every second and are providing investment opportunities of a lifetime.

How do you see investor appetite for hedge funds shifting in the future?

More non-traditional investors such as family offices and high-net-worth individuals are allocating to the hedge fund sector. Investors are seeking differentiated strategies to generate alpha, rather than simply allocating to multi-strategy platforms. The industry will continue to grow, but in a more diverse way.

What have been the biggest drivers of growth within your business?

Innovation, technology penetration and financial inclusion have been the biggest drivers of our business. New business models such as revenue based financing, investment structures such as interval funds, and technology infrastructures such as BaaS, are levelling the playing field of fin-tech investment, but at the same time creating an ultra-competitive environment in which only the best managers can survive by delivering risk adjusted returns.

Which are the most significant challenges in the hedge fund industry right now and how can they best be mitigated?

The biggest challenge is the misalignment of interests, between investors and managers, and managers and regulators, to the point where the whole investment advisory industry could fall apart. But we believe that the market and industry are resilient and eventually will be back on a growth path. We just don’t know at this point, when and how that will happen.

 


 

Jerry Wang, Founder and CEO, Hi2 Global – Jerry founded Hi2 Global in New York in 2014, an Investment as a Service (IaaS) global asset allocation platform. Hi2 Global allocates capital in the US and to emerging markets through private credit and early stage venture funds. Before founding Hi2 Global, Jerry was an Investment Manager at University of Notre Dame Investment Office, managing alternative investments in the US and Asia.

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