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QINGDAO TODAY
在线翻译:
szdaily -> Business/Markets -> 
Foreigners vie to boost hedge fund market share
    2019-12-02  08:53    Shenzhen Daily

THREE years after China opened its 2.5 trillion yuan (US$355 billion) hedge fund market to global asset managers, the industry is discovering just how hard it is to win over the country’s investors.

BlackRock Inc., Man Group and 20 other foreign firms licensed to run Chinese hedge funds — or private securities funds, as they’re known locally — amassed around 5.8 billion yuan of assets as a group till August, according to data compiled by Shenzhen PaiPaiWang Investment & Management Co. The meager haul — amounting to 0.2 percent of hedge fund assets in China — reflects a host of challenges.

International names like BlackRock don’t resonate much in China’s crowded market of close to 9,000 hedge funds, which has its own set of local stars. The world’s largest money manager is routinely confused with private equity major Blackstone Group Inc. UBS Group AG’s shared Swiss roots with Credit Suisse Group AG mean their Chinese abbreviations are just one similar-meaning character apart, also prompting mixups.

The limited name recognition is compounded by distribution hurdles. It all suggests a long wait before China turns into a meaningful source of profit for international money managers, which are desperate for new avenues of growth as clients in developed markets shift toward low-fee investments.

“Building a brand in China is definitely a challenge for some foreign players,” said Hersh Gandhi, Man Group’s managing director for Asia Pacific ex-Japan. “We’ve been thoughtful about the strategies we want to run and the market segments we want to be in, and have sized our operations accordingly.”

Man Group, UBS and BlackRock oversee between 100 million yuan to 1 billion yuan each, according to ranges from PaiPaiWang, which tracks hedge funds in the country.

Fund raising difficulties are common, according to Yan Hong, director of the China Hedge Fund Research Center at the Shanghai Advanced Institute of Finance.

Foreign managers probably can’t make much money managing less than 1 billion yuan, given the operational and compliance costs, he said. (SD-Agencies)

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