Billionaire hedge fund manager John Paulson has won a securities license in Hong Kong, joining the likes of GLG and Soros Fund Management making a beeline for the high potential Asian alternative investment management industry.

Paulson's win, following the establishment of high-profile start-ups such as a $1 billion-plus fund planned by Goldman Sachs' trader Morgan Sze and Tiger Management founder Julian Robertson's backing of Nezu Asia fund, comes as a major stamp of approval for the region, which is emerging as a hub for hedge funds.

With Asian hedge funds projected by fund tracker Eurekahedge to add about $40 billion in 2011 to their current assets of $125 billion, the industry's prospects in the region present a powerful attraction to global players.

The establishment of material regional presence by the major global hedge fund complexes continues and these investments are cause for optimism for the sector locally, said Harvey Twomey, head of prime finance sales, consulting and capital introductions in Asia Pacific for Deutsche Bank .

Surging local wealth in Asia Pacific, where more than three million are millionaires, will also find its way into hedge funds.

Other big industry names such as Moore Capital, Maverick Capital and Viking Global Investors are also eyeing the region as a major destination for growth in future.

Paulson, whose bet that the American mortgage market would implode made him one of the world's wealthiest people, received the license to deal in securities on February 21, according to the records with Securities and Futures Commission in Hong Kong.

Anyone operating in the financial markets in Hong Kong needs the license, which enables them to deal in stocks, stock options, bonds and collective investment schemes.

The hedge fund industry stalwart, who earned an estimated $5 billion in 2010, mainly through bets that the economy would recover, has hired Xiaoli Deng, Sandra Lee and Winnie Wong, all from Morgan Stanley , for roles in his company's Hong Kong operations, the records show.

Financial Times publication Ignites Asia reported earlier that Paulson had received the license for a Hong Kong office.

About a fifth of 100 leading institutional investors in hedge funds surveyed by alternative assets research firm Preqin expressed an improvement in their levels of confidence in hedge funds in 2010, with nearly two-thirds saying Asia would present the best opportunity in 2011.

(Editing by Chris Lewis and Muralikumar Anantharaman)