New | China to approve new foreign fund managers for QDLP scheme

Five foreign fund and private equity managers are set to gain approval to enter a pilot scheme aimed at opening up the mainland to the US$2 trillion-plus global hedge fund industry.

The firms, which include UBS Global Asset Management and Deutsche Asset & Wealth Management, received the go-ahead in February to establish local firms to raise yuan from wealthy and institutional investors to spend on alternative assets overseas, sources said.

Nomura Asset Management, EJF Capital and CBRE Global Investors are also in the new round of the Shanghai-based qualified domestic limited partner (QDLP) programme.

The firms, which are expected to be granted foreign exchange quotas of US$100 million, are likely to start operations by June.

The new licences represent the latest move by the central government to lift restrictions on the yuan and expand the use of its US$3.73 trillion foreign reserves.

QDLP, which was launched in 2013, allows global fund managers to bring together domestic investors in limited partnerships that buy offshore alternative assets.

The programme was "an effective new initiative that allows asset management firms to help domestic professional investors to access more asset classes overseas", said Ling Xinyuan, managing director and China chairman at UBS Global Asset Management.