Shanghai gives funds yuan go-ahead
Shanghai has allowed six global hedge funds to raise yuan funds for overseas equity investments, likely to direct a capital outflow worth a combined US$3 billion.
Shanghai has allowed six global hedge funds to raise yuan funds for overseas equity investments, likely to direct a capital outflow worth a combined US$3 billion.
The city, which is aiming to transform itself into a global financial centre by 2020, officially embarked on a long-awaited qualified domestic limited partner (QDLP) scheme after obtaining approval from state regulators.
Under the pilot run of the QDLP programme, foreign hedge funds may raise yuan capital in Shanghai through local branches and then convert the capital into foreign currencies to make investments in overseas equities.
According to two people involved in the fundraising for the QDLP funds, six international hedge fund managers - including Winton Capital Management, Man Group, Marshall Wace, Citadel, and Och-Ziff Capital Management - were granted QDLP quotas of US$500 million each. The name of the sixth fund that received the QDLP quota is unknown.
It now remains to be seen whether the funds are able to raise enough capital from "limited partners" on the mainland to fill those quotas. Man would not comment on the QDLP matter while the other four companies were not immediately available for comment.
The Shanghai Financial Services Office would not comment on the QDLP progress and a source within the office said Tu Guangshao, a vice-mayor, preferred to be tight-lipped on the financial liberalisation during the initial stages of the pilot programme.