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From Chinahedge.com.cn (not edited by Opalesque): There may be some concern from global investors about the regulatory risk on investing China hedge fund managers. According to the news report from Financial Times, global investors are trying to shun those China managers with active investment operation in mainland China under the concern of any local regulatory risk.

For some China hedge fund managers, they set up both offshore and onshore office. Hong Kong (offshore entity) and Shanghai / Beijing / Shenzhen (onshore entity) office are more or less different in functions. Hong Kong is acting more in marketing and trading function. Shanghai is focusing only on research center to engage fundamental research and policy monitoring. However, for the sake of convenience, Shanghai office may carry additional functions, including receiving potential investors (marketing to some extent) and even trading shares. Most global investors are keen to visit mainland China office to carry out due diligence as the office is the main decision making for stock picking and investment strategies. Global investors are also comfortable with China hedge funds to set up shops in local cities as the team can get more first hand information and monitor the updated sector situation.

Simon Coxeter, Managing Director of AsiaSource Captial, the China funds of fund manager, based in Singapore indicated that there is no regulation covering the managers’ activities. If they cannot argue t......................

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