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Komfie Manalo, Opalesque Asia:

China's so-called 'sunshine' private-trust funds' the nation's equivalent of hedge funds, boomed to reach more than 30,000 in numbers at its peak in 2015 before dropping to nearly 7,000 after regulators initiated a crackdown against 'bad apples.'

Qi Wang of MegaTrust Investments Group, a research-driven and boutique fund manager, told participants in the latest Opalesque 2016 China Roundtable that Chinese regulators are trying to clamp down further and reduce the number of sunshine fund managers to a controllable range. Regulators are also introducing new, foreign competition to the market, he added.

'Our firm actually belongs to those 30,000 so-called private fund managers, also known as sunshine funds,' Qi said. 'So in early 2014, we were in the first batch of sunshine fund managers to get registered with AMAC (Asset Management Association of China). Of course a lot has happened since then, the stock market bubble burst, numerous small managers and peer-to peer financiers went down, people got arrested and despite the crackdown there are probably still some 'bad apples' out there.'

He explained that such scenario is not surprising just like any industry at its early stage, it is always possible to have good and bad apples mixed together.

China has recently introduced a new rule allowing wholly-owned foreign managers to get licensed by AMAC......................

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