By Jeffrey Hodgson

Increasingly risk-averse hedge fund managers are in no mood to chase exotic trades as they scramble to boost returns.

Given the current environment, Robert Appleby, chief investment officer at ADM Capital, told the Reuters Global Finance Summit there was no need to seek out exotic trades or markets for healthy returns.

“You don’t have to go to weird, wonderful places … you don’t have to take exogenous risks — its right at your doorstep,” he said, referring to his funds’ focus on the main markets of Hong Kong, China, India and Turkey.

ADM began investing in distressed debt in 1998 following the Asian financial crisis. Its funds often buy out existing creditors to initiate financial or corporate restructuring of companies that are delinquent or at risk of bankruptcy.

By Kevin Lim

Some companies are taking cost cuts pretty seriously.

That’s the message from Aberdeen Asset Management’s Asia chief as the firm pulls out all stops to trim costs in these lean times.

“Obviously, we’ll travel less. Business class only if more than 6 hours or no business class at all,” Hugh Young said in an interview for the Reuters Global Finance Summit. “There is a big variable element when it comes to bonuses and that’s something we’ll look at.”

“We are also looking at what is small beer like no Coke in the fridge. We can do all that. The last thing of course, which we don’t want to do, is cut people, if it ever comes to that … But on existing budgets annualised from today, we are still profitable.”

Healthcare and education offer a new frontier for Middle
East private equity firms as they take advantage of dramatic
demographic changes in the region.

At least that’s the view held by Dubai-based private equity
player Abraaj Capital.

“With 60 percent of the population, give or take, that’s
younger than 30 years old, you’ve got the need for massive
investment in infrastructure in order to be able to create
employment and cater to this growing population,” Abraaj
executive director Fred Sicre said at the Reuters Middle East
Investment Summit.

In a report this week, Ernst & Young said the Middle East
and North Africa region needs more than $100 billion of joint
investment from the public and private sector over the next five
years to keep up with population growth.

“As well as having the youngest populations on the planet,
we’ve got an increasing number of people going into the 65-plus
age range which is where health becomes a really big issue,”
said Tom Speechley, also an Abraaj executive director.

“You’ve got chronic under-investment historically in the region so governments have opened up the sector to private investment.”

In the past year, the firm, which operates in the Middle East, North Africa and Asia, has invested in a Turkish private
hospital group in Turkey, an Egyptian medical laboratory as well as
retail pharmacies and Speechley sees more to come.

 Lim Boh Soon, chief executive officer of Kuwait Finance House in Singapore said at the Reuters Wealth Management Summit that he sees the period of downturn in the global economy lasting 18-24 months.

However, he thinks the market sell-off over the past two weeks has thrown up good value and said the Middle Eastern bank will look to raise up to $600 million for three Asia-focused funds next year.  Kuwait Finance House is the Gulf third-largest lender.

What do you make of Lim’s assessment on the global economy? Do you think it is a good idea to start buying into the market?

Click here and hear to listen on Lim’s assessment of the global economy.

Takafumi Sato, commisioner of Japan’s financial regulator, makes no bones about the government’s desire for Tokyo to be the No. 1 financial centre in Asia, and he rattled off a variety of reasons why foreign investors and professionals ought to set up shop here. Among them: the world’s second largest economy, democracy and the rule of law, great restaurants, abundant household assets needing management, low crime, great public transportation, four beautiful seasons.

“Now is an excellent time for Japan to close the gap with other global markets,” Sato told the Reuters Japan Investment Summit in touting the Financial Service Agency’s “Better Market Initiative.”

But in what could be seen as a dig at rival Hong Kong, one of Sato’s reasons stuck out — “less-polluted air.”

According to Mercer’s 2008 survey on quality of living worldwide, Tokyo did top Hong Kong with a ranking of 35 compared to 70. In “health and sanitiation,” Tokyo was far ahead of Hong Kong. But another Asian rival, Singapore, is just ahead in the overall rankings at 32. And even for Japan’s renowned safety (imagine your forgotten iPod being returned to the front desk at the gym), Singapore also bested Tokyo.

Then again, there are all those Michelin-starred restaurants.

Sato’s listing of Tokyo’s attributes was in reponse partly to another issue that has cropped up when it comes to attracting talent to Japan’s megalopolis: nannies. To some critics, Japan’s strict immigration laws that make it difficult for foreign workers to bring nannies with them highlight Tokyo’s detractions.

Allan Smith, president of the American Chamber of Commerce in Japan, told the summit Japan has made strides to help foreign companies and financial firms operating here but could do more, such as better clarity in regulation.

“I wouldn’t want to say that if Japan built a Canary Wharf and offered nanny visas, everyone would come flocking. There are other things as well,” Smith said.

But one of Smith’s suggestion would likely make the FSA happy: “If Japan is going to be a financial services centre, it is going to have to increase the resources of the FSA.”