|Information Times: Tighter regulation is a global trend. Analysis suggests China’s private funds will face more opportunities than challenges for going offshore.||
Information Times (Zhao Xian) With the explosive growth of the domestic private fund industry, 2016 was also seen as the tightest-regulated year. In the 11th China Hedge Fund Forum on 18 March, 2017, several private fund institutions shared their suggestions and views regarding Chinese fund managers going offshore and regulation. They believed going offshore will bring larger opportunities than challenges.
Li Wei, Executive Vice President of OP Investment Management, commented that domestic private funds are not able to launch products within a few weeks as in the past due to the tight regulation nowadays. Thus, some investors have shifted their attention to overseas market. “It won’t happen in overseas market as it’s widely known that the overseas regulation is more comprehensive and independent, and the capital is safer and more transparent,” he said.
Li Wei also stated that only if you have relative advantages in some fields can you consider to go offshore. It depends on whether your resource endowment support you to make investment in overseas markets. “It is practicable for funds who have already had a large amount of capital overseas while seeking stable returns. Another scenario is that you’ve focused on a specific industry such as internet. You could integrate your existing accounts and make investment in the same market,” said Li Wei, “I don’t recommend managers who focus on A-share to arbitrage in this way.”