Shanghai Seeks Approval For Chinese Foreign Hedge Fund Program

Mar 20 2013 | 12:13am ET

A rivalry between Chinese financial centers could be good news for foreign hedge funds eager to tap into the country's wealth.

The government of Shanghai has asked the State Administration of Foreign Exchange to approve a US$5 billion quota for the planned qualified domestic limited partner scheme. That program would allow China's richest citizens to invest in foreign hedge funds licensed in Shanghai.

The program will be open only to hedge funds with at least US$10 billion in assets, and all investments will have to be approved by the foreign-exchange regulator.

It is unclear when the program will debut, but an official with the Pudong Financial Services Bureau told the South China Morning Post that "the QDLP program will be launched sooner rather than later. The city officials are very active in pushing ahead with major liberalization, including the QDLP."

It is possible that the SAFE may grant Shanghai a lower US$3 billion initial limit for the program,

The new urgency on the part of Shanghai comes as it feels pressure from Shenzhen, just north of Shanghai, whose Qianhai district has been designated an experimental financial zone. Some fund managers have said Qianhai is more efficient than Shanghai in approving new funds and easing cross-border capital flows with Hong Kong, according to the Morning Post.


In Depth

Dillon Eustace: The Advantages of ICAVs

Feb 11 2016 | 7:51pm ET

As the growth of alternative investment vehicles continues, global asset managers...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedging Against Reputational Risk in the 21st Century

Feb 12 2016 | 7:18pm ET

For investors, the first step in researching a new fund or manager is to google...