Global fund launches climb in China as yuan slumps

Managers such as Blackstone, Bridgewater Associates, and Oaktree Capital Management have opened funds, though they have not disclosed total fundraising. — Reuters

HONG KONG: Global fund launches in China have hit a record as a weakening yuan and fragile economy drive demand for foreign assets, in the latest sign of low confidence among domestic investors.

Eleven funds issued under the Qualified Domestic Limited Partner (QDLP) programme have been launched so far this year, according to data by Z-Ben Advisors, already outpacing the full-year number from any previous year.

Managers such as Blackstone, Bridgewater Associates, and Oaktree Capital Management have opened funds, though they have not disclosed total fundraising.

The products, which raise money from high net worth and institutional investors and invest in overseas assets, are booming as Chinese markets flounder. The yuan is at six-month lows against the US dollar, the stock market shows signs of fatigue after a rebound from five-year lows struck in February and benchmark 10-year government bond yields have hit record lows.

“Investors’ demand for offshore products have been rising quickly this year due to a weak yuan and sentiment,” said Ivan Shi, head of research at Shanghai-based Z-Ben Advisors, adding alternative investments and foreign bonds are popular.

In April, Blackstone launched its first QDLP fund, channelling money to the firm’s Private Equity Strategies fund.

The initial sales target of US$40mil was reached in less than two weeks, according to two people familiar with the matter. Blackstone declined to comment.

Hedge fund giant Bridgewater has also set up an outbound fund this year, according to official data.

Another newcomer, US asset manager Principal Financial Group, has rolled out a data centre fund, while Oaktree, abrdn and UBP are among firms that issued global bond funds.

Introduced in 2012, QDLP funds supplement other outbound investment channels in China. — Reuters