Among China’s strategical focus in the 21st century are the built out of financial services and big data (TMT). The opening of the Chinese private securities funds sector has already started, and allows different styles of fund management using liquid instruments such as stocks, bonds and commodities.
Apart from the RMB 8 trillion mutual funds industry, a strong RM 1.8 trillion private funds industry has grown to now about 20,000 private securities funds. An estimated 15% of those follow a typical hedge fund, quant or CTA investment style. The broader 80% of private funds are still long only.
Insiders see this opening up of the private security licenses as very encouraging, and expect other sectors like investment consultancy and risk management consultancy will benefit from a further potential opening as well. 300 major banks, insurance and financial companies are operating from Pudong alone. Considering the potential size of the countries’ different markets, the opportunities are simply humongous.
Shanghai Hedge Fund Park: The astounding success many other Chinese provinces aim to copy
The launch of the Shanghai Hedge Fund Park was an astounding success and a mark of legalization of the hedge fund industry (see page 15 and following). Financial services veteran Kenny Li, who was involved in helping the Shanghai Government setting up the first hedge fund park in the HongKou District of Shanghai, says he has been approached by four different provinces to become a hedge fund development zone consultant. The officials understand hedge funds can grow AUM quickly in China, and that it is relatively inexpensive to give incentives to support them.
The inaugural Opalesque China Roundtable was sponsored by Eurex and WTS and took place end of 2016 in Shanghai with:
Martin Ng, WTS
Sophia Sung, Eurex
Dr. Martin Lockstrom, QuantCore Capital Management
Kenny Li, Quattro Quant
Sun Suzhi, CITIC Futures
Robert Welzel, WTS
THE GROUP DISCUSSED:
How leverage burst the China bubble (page 9 and following)
How many trillion RMB of bad leverage are in the Chinese system? (page 9)
Where regulations may be heading in China? (page 8 and following)
Why the Chinese PE market is a lot more mature than what many think (page 18)
How FinTech can change the wealth management landscape in China in a way that most other countries can never imagine (page 20)
Tax: What you should know about certain high-risk areas in China (page 20)
Why the Shanghai Futures Exchange, the Dalian Futures Exchange and the Zhengzhou Futures Exchange have been experiencing significant increases in trading volumes (page 4)
What is the first international exchange JV the Chinese have entered, and where is that based? (page 10)
How have Chinese funds dealt with the volatility and market interruptions during the summer 2015 (page 11)?
How can foreign managers set their foot into China (page 13 and following)?
Update on Shanghai and other Chinese hedge fund parks (page 15 and following)
Will there be a London-Hong Kong stock connect? (page 8)