ASSET managers began fundraising for six Chinese “unicorn” funds Monday, offering retail investors a new investment channel but potentially straining tight market liquidity.

The 300 billion yuan (US$47 billion) they seek to raise in the coming week stands to top all the equity funds raised in China last year, and the money will be used to fund mainland listings of homegrown tech firms such as smartphone maker Xiaomi and Alibaba Group.

The launch of the six mutual funds — the biggest such move orchestrated by the government since rescue funds were set up during the 2015 stock market crash — could sap market liquidity in the short term and lead to more volatility.

The funds are launched during a month when the market is already bracing for tighter liquidity from the central bank’s mid-year health checks on banks’ balance sheet, Sinolink Securities said in a note.

Investors are also divided over the merits of the funds as the three-year lockup period is seen by some as risky.

Retail investors and select institutions can invest in the six funds which are each raising as much as 50 billion yuan to support upcoming mainland tech listings.

The six funds, which will participate in tech IPOs as cornerstone investors, can get a guaranteed allocation of shares, or China Depositary Receipts (CDRs), before other types of investors scramble for the remaining pie in a lottery.

The six fund managers picked by the government to launch the funds are China Southern, China AMC, E Fund, Harvest, China Universal and China Merchants Fund.

The resources marshalled for the funds include fast-track approval and nationwide distribution networks at State lenders.

The six funds will raise money from retail investors between June 11-15, before taking subscriptions from institutions June 19.

“It’s an epoch-making gala for all investors,” China Southern Fund Management said in an online advertisement.

Investors will be allowed to transfer holdings in the secondary market six months after launch, but some fear a rush to exit could trigger a deep discount in fund prices.(SD-Agencies)