Mon, Oct 24, 2016
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. M&A - U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga, Hedge fund Parvus shows hand, toppling William Hill merger deal[more]

    U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga From The fierce battle to buy Britain's biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize. SVG Capital has agreed

  2. Marc Lasry: Energy is still a phenomenal opportunity[more]

    From Distressed debt specialist Marc Lasry said energy debt is still a "phenomenal opportunity" because investors can get "massively overpaid" for the risk they take on. There are "huge opportunities" in the energy sector especially in restructurings, the Avenue Capital Group CEO said Tues

  3. Opalesque Exclusive: Ex-SAC manager re-emerges with market neutral hedge fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A manager re-emerged from the SAC battleground last year to launch his own hedge fund under the umbrella of New York-based investment firm Endicott Group.

  4. North America - Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation, Billionaire hedge fund titans Dinan, Lasry on election, markets and best investment ideas[more]

    Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation From Kyle Bass, founder of Hayman Capital Management, on Wednesday warned that the U.S. is headed toward so-called stagflation. Stagflation is typically described as persistently high inflation and hi

  5. Other Voices: Follow the advice of investment consultants - I think not[more]

    Mark Rzepczynski, Founding Partner, Chief Investment Officer AMPHI Research and Trading, writes on Harvest Exchange: Investment consultants are a force to the reckoned with in the pension world. They advise and drive many pension decisions around the globe. Consultants literally control trillion