Fri, Dec 15, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

China’s private fund sector beset with severe losses and liquidations

Monday, July 04, 2011
Opalesque Industry Update – The once all powerful private funds sector of China is showing signs of crumbling. A study by Shanghai-based data provider Suntime Corporation showed that the sector returned an average -6.47% so far this year with a negligible 14% of private funds reporting positive results.

With the mediocre performance of China’s private funds sector, industry analysts believe that the industry has entered a new stage of development. In order to survive, the sector must introduce policies to generate consistent positive performance and convince investors with competent management.

According to a report by AsianInvestors, Chinese private funds are already feeling the pinch and have been starting to implement reforms, including the implementation of aggressive strategies and increasing concentrated positions in the A-share markets that generated stellar returns. But as the stock market corrected this year, the Shanghai Composite index fell -14% from mid-April to late June. This has only further added to the woes of the private funds sector. Although Suntime CEO Zhang Zibing described the setbacks being suffered by the private funds sector as temporary and even hinted that the industry is growing healthier. “The setback that private funds have experienced this year is temporary. In the long term, talented investment managers will continue to emerge to keep the industry growing,” he said.

Data from Suntime disclosed that this year, 322 private funds were launched with the aggregate assets under management of the sector rising to Rmb162bn as of June 20, from Rmb147bn at the end of last year.

Indeed the Chinese market is getting negative sentiments from investors particularly amongst hedge funds as of late. Last week, it was reported that hedge funds and local investors have been getting increasingly pessimistic about Greater China stocks, with the short interest on the Hang Seng Index now near a one year high.
Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Mediobanca acquires majority stakes in Swiss hedge fund[more]

    Komfie Manalo, Opalesque Asia: Listed diversified banking group Mediobanca SpA said it has acquired a majority stake in Geneva-based hedge fund firm RAM Active Investments SA (RAM AI), an active and alternative asset manager offering a range of act

  2. North America - Miami could attract hedge funds if SALT deductions axed[more]

    From Law360.com: For years, inertia has been Nitin Motwani's greatest foe in his attempts to lure hedge fund owners in the northeast to Miami, which he has pitched as a tropical low-tax paradise. But with the Republican tax bill proposing to eliminate deductions for state and local taxes, he's sensi

  3. Northleaf Capital Partners closes debut private credit fund on $670M[more]

    Bailey McCann, Opalesque New York: Northleaf Capital Partners has closed its debut private credit fund - Northleaf Private Credit I - on $670 million. The vehicle will invest in private credit transactions in Europe and North America, with a primary focus on lending to private equity-backed compa

  4. ...And Finally - The ongoing gun saga in the U.S.[more]

    From Newsoftheweird.com: As elder members of the First United Methodist Church in Tellico Plains, Tennessee, gathered on Nov. 16 to discuss the recent church shooting in Sutherland Springs, Texas, one of those present asked if anyone had brought a gun to church. One man spoke up and said he c

  5. Opalesque Exclusive: Credit Suisse Asset Management's NEXT Investors leads $6M Series A round for LUX Technology and Services[more]

    Bailey McCann, Opalesque New York: Credit Suisse Asset Management's NEXT Investors has led a $6 million Series A funding round for LUX Technology and Services, a business and technology solutions provider for the alternative assets industry. The investment will be used to fuel growth of Trans