Hedge Fund Intelligence Hedge Fund Intelligence - China | Page 26

CHINA 2013 ASSET MANAGEMENT generating double-digit alpha will be flat this year,” says Wang. “That makes it difficult for absolute return products to compete with wealth management products backed by real estate loans offering one-year coupons of 10%.” The growth prospects of sunshine funds have been enhanced by the recent passage of amendments to the country’s investment law, which market participants say will help to de-stigmatise the Chinese hedge fund industry and accelerate consolidation across the sector. By legitimising the sunshine funds movement, the amendments to the law will also help support of the larger players’ ambitions of raising fresh capital from global investors by establishing operations in Hong Kong. Colin Lunn, head of fund services at UBS in Hong Kong, believes that with this new-found regulatory support, the sunshine fund industry could grow from its estimated current size of $25 billion to $100 billion over the next few years. At Rongzhi, Li is equally upbeat about the prospects for Chinese hedge funds, giving four engines of growth for the market. Natural growth will flow from the continued expansion of the economy and the rising numbers of high-net-worth individuals, says Li. He also says growth will be supported by a more accommodative regulatory regime and by a more sophisticated asset management community – led, in many cases, by local managers returning to China Colin Lunn, head of after stints overseas. fund services at UBS Market participants say that the amendments to in Hong Kong the investment law needs to be seen as part of a >> The sunshine fund much broader long-term overhaul, modernisation industry could grow from and liberalisation of the Chinese securities and investment management industries. its estimated size of $25 Managers are confident that one by-product of billion to $100 billion over the liberalisation of the alternative investment the next few years >> management industry will be that it allows for the
26 Special Report September 2013
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