Mon, Sep 22, 2014
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. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali