The Asset Management Association of China (AMAC) has
officially granted certificates of registration to 50
alternative asset management firms in the country, under a new
regulatory regime that will allow them to operate more like
their hedge fund counterparts in Hong Kong and
The newly-approved managers can now directly manage their
own funds and market them to qualified institutional and
high-net-worth investors, instead of routing them through trust
institutions. The approved list includes 33 sunshine or private
fund managers and 17 other managers involved in private
equity/venture capital investing.
Among the managers given recognition at a ceremony in
Beijing last week were Shanghai Chongyang Asset Management,
Greenwoods Asset Management, PingAn Russell Investment
Management, Pegasus Investment Management (Shanghai) and
private equity fund managers CDH Investment Management
(Tianjin) and Sequoia Capital Equity Investment Management
More than a thousand firms have logged into the AMAC and
applied to register online since the platform started accepting
applications on 7 February.
AMAC has been designated to oversee the alternative asset
management industry in China. It has pledged to act on
applications within 20 working days after an applicant
completes submission of pertinent papers and documents.
The registration of mainland alternative asset management
firms came just a few days after the conclusion of the National
People’s Congress in Beijing. The tide of AMAC
applications provides the most concrete evidence yet on how
rapidly the number of sunshine private fund managers in the
country has exploded, barely nine months after a new law on
securities investment firms took effect.
However, it is not clear when exactly sunshine funds could
begin selling directly to qualified investors because the China
Securities Regulatory Commission (CSRC) first needs to issue
its guidelines on who can be considered as a qualified
AMAC has proposed that qualified high-night-worth investors
should have at least CNY5 million ($800,000) in financial
assets while institutions should have at least CNY10 million in
assets in order to be considered qualified investors for hedge
fund products. AMAC also wants minimum subscription for hedge
funds to be set at CNY1 million.
Shanghai Chongyang, the biggest sunshine private fund in
China with $2 billion in assets under management, says its
newest fund, the internally-seeded Chongyang A Share Alpha
Hedge Fund, could start trading once trading accounts are
obtained from China’s stock exchanges.
Shanghai Chongyang’s president and partner,
Wang Qing, noted that the firm will have a higher investment
threshold requirement for the new fund, which he says "will be
China’s first truly genuine hedge fund".