Chinese fintech firm CreditEase to pioneer funds of funds as alternative to direct real estate purchases
CEO: high-net-worth individuals will turn to professionals for returns in future
CreditEase, one of China’s largest financial technology companies, has set its sights on funds of funds focusing on real estate projects as founder and chief executive Tang Ning anticipates a new property investment scenario.
The company will map out detailed operating guides to pursue fast growth in the funds of funds business by the end of this year, as it offers an investment alternative to high-net-worth individuals on the mainland, Tang said.
“Real estate investment has its width and depth,” he said. “In the next 10 to 20 years, individual property investors will shift from the DIY [do it yourself] model to partnering with professional organisations in chasing returns.”
At present, high-net-worth individuals in China seeking returns from property investment often directly buy and own residential or commercial units, betting on the appreciation of assets.
Most have struck it rich over the past two decades, benefiting from constant property price increases.
Tang, who studied economics in the United States before returning to set up Beijing-based CreditEase in 2006, said the market will break from a past when easy and quick money could be earned from buying properties.
CreditEase, which specialises in lending to small businesses and consumers as well as wealth management for affluent investors, plans to set up a clutch of funds of funds that will allocate capital to leading global real estate funds managed by big names such as Blackstone and KKR.