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Matthias Knab, Opalesque:

According to the Shanghai Hedge Fund Association, DCL Investments, a Beijing-based distressed asset manager, announced it had raised over 500 million USD for its first special situation fund. DCL is a new venture founded by the management team and CDH Investments, which is a leading private equity firm in China. The new fund made a record which meant DCL was the biggest fund manager in the distressed investment industry in China.

"We estimated that there would be 5 trillion RMB non performing loans in the China banking industry. It is the best time for distressed investors to seek new opportunities right now. " said by Selina Zheng, CEO of DCL Investments. "Our activities range from investing in a broad array of credit instruments such as NPLs and high yield bonds to providing capital in special situation such as restructuring and rescue financings."

Recently, the Chinese government unveiled a controversial loan-relief plan that could help companies reduce their mounting debts. Most SOEs and private companies borrowed lots of money from Chinese domestic banks for their overcapacities in past golden days. When the growth of GDP went down, they failed to raise enough money to pay their debts.

Many global investors, such as Oaktree and KKR, are also looking for investment opportunities in the China distressed assets. The first step for them is joining venture with local partners.......................

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