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Bridgewater to raise 1 billion yuan for its new investment fund in China - PingW...

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Bridgewater to raise 1 billion yuan for its new investment fund in China

Bridgewater to raise 1 billion yuan for its new investment fund in China

Rebbeca Ren

posted on December 14, 2022 3:41 am

In light of the country's efforts to open up its financial sector, many global financial institutions have been trying to build a greater presence there.

Bridgewater recently launched a new round of financing for its investment fund in China, raising more than 1 billion yuan ($143.99 million), according to China Fund News.

The fund, which targets institutional investors and high-net-worth individuals, is being distributed by major banks in China, with subscriptions starting at 2 million yuan. Last November, the world's largest hedge fund raised 8 billion yuan for its third investment fund in China. 

Speaking of the latest funding, Bridgewater China said that it is moderately bullish on Chinese assets, and the valuation of stocks in the secondary market is "very attractive".

Chinese stocks have seen a rebound as the government recently unveiled guidelines to ease its grip on Covid-19 control works. The Hang Seng Index is down 16% so far this year, while the Shanghai Composite Index is down 12.73%.  This is primarily due to the freeze in the real estate sector, as well as the COVID-19 lockdown's negative impact on economic activities.

Since valuations appear to have priced in a great deal of bad news, it may be an opportunity for Bridgewater, the hedge fund founded by longtime China bull Ray Dalio, to raise its bet on China.

Bridgewater’s wholly-owned China subsidiary received a license to sell investment products in 2018, and the following year became qualified to conduct investment advisory business in the country.

As of last year, Bridgewater has managed more than 10 billion yuan ($1.49 billion) in China, surpassing Winton and Man Group to become the country's largest foreign hedge fund firm. While the figure is considerable, it accounts for only 1% of Bridgewater's global business.

China scrapped ownership restrictions for foreign financial institutions in 2020. In light of the country's efforts to open up its financial sector, many global financial institutions have been trying to build a greater presence there.

Last week, Fidelity has obtained the nod from China’s securities watchdog to begin its mutual fund business in the country. BlackRock received the approval for mutual fund operations in China last year in June, while Neuberger Berman secured the go-ahead for the same last month.

Although sentiment towards the Chinese market is turning more positive, BlackRock has changed its expectations for the market. 

The company, which raised 6.68 billion yuan in its maiden mutual fund for individual investors in China last September, said in November that it was cautious about the long-term outlook for Chinese stocks.

“Geopolitics remains a key risk,” portfolio managers including Belinda Boa, head of Asia Pacific active investments, wrote in a 2023 outlook report. The money manager’s tone breaks with the growing bullishness toward China and is markedly different from its own view a year ago.


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