US asset manager Federated Hermes joins wave of finance firms setting up in Hong Kong

Federated Hermes, a New York-listed asset-management firm, plans to set up a Hong Kong office to seize opportunities in Asia’s markets amid ongoing global geopolitical tensions.The company confirmed the move a year after CEO Chris Donahue said at the Asian Financial Forum (AFF) that the Pittsburgh-headquartered firm was considering a presence in the city. The plan had now won board approval and would be announced during this year’s AFF, which kicks off on Monday, the company said. The plan would be subject to a nod from the Securities and Futures Commission.Global financial institutions are putting boots on the ground in Hong Kong again, as China’s tech sector has revitalised investor appetite, with the world’s second-largest economy increasingly using the city as its primary capital hub. Quantitative trading firms Jane Street and Qube Research & Technologies have leased office space in prime buildings in the city in recent months.“It’s vital that we’re able to service [the biggest financial institutions] in Hong Kong at a local level, because this is where they’re seeing a lot of their growth,” said Jim Roland, head of distribution for Asia Pacific at Federated Hermes, which managed US$871.2 billion in assets as of the end of September. He added that the asset manager’s expansion to Hong Kong – it already has offices in Singapore, Tokyo and Sydney – was based on feedback from clients and partners.Demand for asset diversification had been growing since the sweeping tariff war initiated by the US in April, prompting clients to rethink their investments in US equities, Roland said.“They don’t want to get out of US equities, but they’re a bit skittish following this sharp sell-off [in April] followed by the sharp recovery,” he said.Federated Hermes’ money-market assets reached a record US$652.8 billion at the end of September, up 10 per cent from a year earlier.