UG Investment Targets Taiwan’s Growing Wealthy Investor Pool

UG Investment Advisers, a Singapore-based hedge fund manager with origins in Taipei and $3.7 billion in assets under management, has signed an agreement with E.Sun Commercial Bank to distribute a long-short equity strategy to Taiwanese investors. The deal was completed last month and is the firm’s first distribution partnership with a domestic bank.

Founded in 1998, UG Investment operates teams in Singapore, Shanghai and Taipei and manages three funds with combined assets of $3.7 billion. The firm employs 43 fund managers, analysts and quantitative researchers.

The strategy being prepared for onshore distribution is UG’s largest, managing more than $2 billion and focusing mainly on technology stocks in the United States and Asia. The fund returned 14.2% in the first seven months of the year, fell 2.5% in July and has delivered an annualised return of 15.4% since its 2007 launch.

Taiwanese rules require offshore hedge funds, private equity and private credit products to be distributed to individual investors through licensed banks or asset managers. Individual funds are limited to 99 investors and participants must hold at least TWD30 million, roughly $953,000. The Financial Supervisory Commission has indicated plans to ease some of those limits.

Private funds sold to high-net-worth investors remain a small part of Taiwan’s wealth-management market; outstanding value was TWD7.38 billion earlier this year, about 0.32% of assets managed for wealthy clients. Local banks and asset managers have been seeking alternative products for wealthy clients as demand for semiconductors and other technology businesses supports the economy and stock market.

Other recent distribution partnerships include Cathay United Bank with Carlyle and CTBC Bank with Ardian on private equity and secondaries funds. Brandy Chen, chief operating officer at UG Investment, pointed to rapid wealth creation tied to Taiwan’s artificial intelligence industry and regulatory steps to strengthen the financial sector as reasons for expanding onshore.