According to the law firm's survey, in 2004, there were 28 investment companies, 21 of them originating in the Caymans, compared to 17 investment companies, 11 of which were from the Caymans, in 2001.

The Walkers analysis also revealed a 470%, or $217 billion, increase in private equity funds raised in Hong Kong over the last three years, growing from $58.6 billion raised in 2001 to more than $276 billion in 2004.

"Given a surging local stock market and the growing global pool of money available for hedge fund and private equity investment, Hong Kong offers global offshore investors a jurisdiction that is savvy, sophisticated, and stable," Vicki Hazelden, managing partner at Walkers' Hong Kong office observed, "precisely the characteristics that every investor craves. With more than $60 billion invested in hedge funds across Asia today, the growth curve is clearly poised to accelerate throughout the rest of 2005 and into the future."

It is expected that hedge fund flows into Asia will grow even stronger in the wake of China's recent revaluation of the yuan. The upward tick in private equity deals is also expected to get a boost from the currency change.

In recent years, Asian hedge funds have grown from 162 funds managing $13.8 billion in 1999 to more than 500 funds managing in excess of $59 billion at the end of 2004 - with some experts putting that number at $65 billion today.