3 Sep 2010
E Fund Management Co., a ranking Chinese fund manager with assets of nearly $30 billion, is launching the country’s first officially registered hedge fund after the securities regulator recently modified rules to permit short selling and the use of index futures. E Fund plans to raise money from high-net-worth individuals in separate managed accounts.
Liu Zhen, a former U.S.-based money manager at Brevan Howard and D.E. Shaw, and now a managing director at E Fund, told Bloomberg News that the fund will charge “2 and 20” like fees. Chinese funds will still be hampered by only limited leverage, the small number of securities available to borrow and the relatively small range of derivatives products available.
Other firms, including China Southern Fund Management are also in the early stages of setting up a hedge fund. The China Securities Regulatory Commission has cleared the way for hedge fund products by sanctioning index futures in the hope of paring volatility. It has also said it won’t regulate the investment purposes and information disclosure of managed accounts targeted at private investors. Bank of China will be the trustee for the product.
Liu Zhen, a former U.S.-based money manager at Brevan Howard and D.E. Shaw, and now a managing director at E Fund, told Bloomberg News that the fund will charge “2 and 20” like fees. Chinese funds will still be hampered by only limited leverage, the small number of securities available to borrow and the relatively small range of derivatives products available.
Other firms, including China Southern Fund Management are also in the early stages of setting up a hedge fund. The China Securities Regulatory Commission has cleared the way for hedge fund products by sanctioning index futures in the hope of paring volatility. It has also said it won’t regulate the investment purposes and information disclosure of managed accounts targeted at private investors. Bank of China will be the trustee for the product.
