Chinese Hedge Fund Launches Swell As Count Nears 25,000!# Stock
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By Mark Melin on December 28, 2015 2:10 pm
Chinese Hedge Fund Launches Swell As Count Nears 25,000!
Chinese Hedge fund – As looser regulation has swept across China, new hedge
fund launches are surging at an unheard of pace. This all comes at a time
when some of the larger hedge fund managers have “gone incommunicado,” or
worse yet, “missing” amid a government crackdown.
The Asset Management Association of China (AMAC) counts 24,625 hedge funds
as of December 2015, up from nearly 17,000 in January of the same year. The
nearly 44% increase over the course of a year reveals a monstrous industry.
A quick scan of the Prequin database, for instance, shows there are 19,000
global hedge funds listed, as a relative point of comparison. “Over the
last six weeks, average weekly hedge fund product launches have exceeded 660
, a dramatic increase from the five weekly product launches in August,” a
report from Red Pulse, an institutional research service, noted in a
December 15 report.
A key causation for the increase in hedge fund launches are new rules
instituted in 2014 making it easier for individuals to acquire a hedge fund
license.
China has sought to improve market liquidity and increase institutional
participation in local markets, particularly following the dramatic rise and
fall of China’s stock markets in 2015. As ValueWalk reported in June, the
government is encouraging entrepreneurship in the financial services
industry and it has led to a flood of fund registrations. “In the past 14
years I’ve never seen regulators so encouraging of innovation. In the
investment industry, we’re taking the lead,” Feng Gang, chairman of
private equity firm WinSure Capital, was quoted as saying.
Of the nearly 25,000 Chinese hedge funds, 54 have assets over 5 billion yuan
, the Red Pulse report noted with a rapidly growing base.
The growth in China comes amid concerns over hedge fund managers flying fast
and loose with regulations, potentially endangering market security, as the
Red Pulse report noted
No more than two days after announcing that hedge fund ranks had swelled to
near 25,000, the AMAC said that new operating guidelines instituted by
regulators are looking to reign in rogue players who might be damaging
market security. The AMAC, which released new guidelines to tackle “
irregularities” that have cropped up, dealt with 143 violations through
November in 2015, with most issues relating to public promotion, misleading
advertisement and illegally holding deposits.
Many of the rules are designed to protect individual investors. Qualified
investor requirements in China are rising, as they are in the U.S. Minimum
subscriptions for individual investors if 1 million yuan with investor net
assets of 10 million yuan. The minimum subscription for institutional
investors is 10 million yuan. There is also a required “cooling off period
” where contracts must not be signed for one day after terms have been
agreed upon.
The investment minimum requirements come as restrictions were set for fund
promotion, including public advertising, misleading or deceiving investors,
belittling competitors and publicizing funds not owned.
The new restrictions come as four more hedge fund managers have gone “
missing” over the last four weeks, including Shenzhen Hongfu Equity
Investment Fund Management, China-Highway, Hubei Shangjia Xinrun Fund
Management and China Chengxin.
http://www.valuewalk.com/2015/12/chinese-hedge-fund-stats/
Chinese Hedge Fund Launches Swell As Count Nears 25,000!
Chinese Hedge fund – As looser regulation has swept across China, new hedge
fund launches are surging at an unheard of pace. This all comes at a time
when some of the larger hedge fund managers have “gone incommunicado,” or
worse yet, “missing” amid a government crackdown.
The Asset Management Association of China (AMAC) counts 24,625 hedge funds
as of December 2015, up from nearly 17,000 in January of the same year. The
nearly 44% increase over the course of a year reveals a monstrous industry.
A quick scan of the Prequin database, for instance, shows there are 19,000
global hedge funds listed, as a relative point of comparison. “Over the
last six weeks, average weekly hedge fund product launches have exceeded 660
, a dramatic increase from the five weekly product launches in August,” a
report from Red Pulse, an institutional research service, noted in a
December 15 report.
A key causation for the increase in hedge fund launches are new rules
instituted in 2014 making it easier for individuals to acquire a hedge fund
license.
China has sought to improve market liquidity and increase institutional
participation in local markets, particularly following the dramatic rise and
fall of China’s stock markets in 2015. As ValueWalk reported in June, the
government is encouraging entrepreneurship in the financial services
industry and it has led to a flood of fund registrations. “In the past 14
years I’ve never seen regulators so encouraging of innovation. In the
investment industry, we’re taking the lead,” Feng Gang, chairman of
private equity firm WinSure Capital, was quoted as saying.
Of the nearly 25,000 Chinese hedge funds, 54 have assets over 5 billion yuan
, the Red Pulse report noted with a rapidly growing base.
The growth in China comes amid concerns over hedge fund managers flying fast
and loose with regulations, potentially endangering market security, as the
Red Pulse report noted
No more than two days after announcing that hedge fund ranks had swelled to
near 25,000, the AMAC said that new operating guidelines instituted by
regulators are looking to reign in rogue players who might be damaging
market security. The AMAC, which released new guidelines to tackle “
irregularities” that have cropped up, dealt with 143 violations through
November in 2015, with most issues relating to public promotion, misleading
advertisement and illegally holding deposits.
Many of the rules are designed to protect individual investors. Qualified
investor requirements in China are rising, as they are in the U.S. Minimum
subscriptions for individual investors if 1 million yuan with investor net
assets of 10 million yuan. The minimum subscription for institutional
investors is 10 million yuan. There is also a required “cooling off period
” where contracts must not be signed for one day after terms have been
agreed upon.
The investment minimum requirements come as restrictions were set for fund
promotion, including public advertising, misleading or deceiving investors,
belittling competitors and publicizing funds not owned.
The new restrictions come as four more hedge fund managers have gone “
missing” over the last four weeks, including Shenzhen Hongfu Equity
Investment Fund Management, China-Highway, Hubei Shangjia Xinrun Fund
Management and China Chengxin.
http://www.valuewalk.com/2015/12/chinese-hedge-fund-stats/