The fund, which manages about $4 billion in assets, will open an office in Singapore, according to three people familiar with the details. It started in 1998 and currently operates from Taipei and Shanghai. Tensions between the US and China have increasingly focused on Taiwan, with Russia’s invasion of Ukraine in February fueling speculation that Beijing could seek to annex the democratically-ruled island in the coming years. China claims sovereignty over Taiwan, and the Chinese military has significantly increased its activity in the region over the past two years. Two people with knowledge of UG’s plans said the threat of an invasion was a factor in its decision to open an office in Singapore. Other factors included retaining talent and hiring new staff for investments in Southeast Asia, one of the people said. UG management, including chief investment officer Rachel Tsai, is not expected to move from Taiwan and the fund will not close its offices in Greater China, according to one of the people. UG’s chief operating officer Brandy Chen, who joined the hedge fund from JPMorgan 13 years ago, visited Singapore in June to review regulatory permits and office space, the person added. UG said in response to a request for comment on its move to Singapore that the Financial Times information “does not truly reflect” its view, but did not elaborate. Investment professionals in the region described the opening of an office in Singapore as a sensible precaution. A founder of another investment firm with ties to Taiwan and Hong Kong said it was a “prudent move” but added that he believed the risk of a Chinese invasion of Taiwan was minimal.

“Southeast Asia, especially Vietnam and Indonesia, is where Taiwan’s money generally goes anyway,” he added. Singapore is working to strengthen its reputation as a leading financial center in Asia. Hong Kong has historically been the main hub for global financial services groups in the region, but Beijing’s national security law and draconian pandemic control measures have damaged its reputation. Singapore launched a new corporate structure in 2020 to encourage hedge funds to move assets. One of the people with knowledge of the business described UG as one of the “best kept secrets” of Asian hedge funds. The low-profile fund was started by Eugene Wang in 1998 with an initial capital of $20 million after he left Taiwanese brokerage group Yuanta Securities. It was one of the first hedge funds in Taiwan and one of the first foreign investors in the Chinese markets. It was granted a foreign institutional investor license with a special permit soon after China launched the program in 2002, which allowed foreign investors to trade on stock exchanges in Shanghai and Shenzhen for the first time.