At the beginning of July, Wellington Global Private Equity Fund Management (Shanghai) Co., Ltd. completed the registration and became a qualified domestic limited partner (QDLP) private equity fund manager. The total number of foreign private equity funds in my country has increased to 43.For more than five years, foreign asset management giants such as Fidelity, Bridgewater, Schroders, Lubrizol, and UBS Asset Management have all entered the Chinese market.
Industry insiders believe that China's asset management market has become one of the largest and fastest-growing markets in the world, and foreign private placements are increasingly interested in the Chinese market.
For some slow-developing foreign private equity, the first thing to do now is to adjust the strategy, first adapt to the needs of local investors, and then seek further development.
The total number of foreign private placements has reached 43
On January 3, 2017, Fidelity Litai became the first foreign private equity firm.Since then, foreign asset management giants such as Fidelity, Bridgewater, Schroders, Lubrizol, and UBS Asset Management have established foreign private equity fund management companies.
Since the beginning of this year, Beijing Daotai Lianghe Private Equity Fund, Kaide Private Equity Fund, AXA Private Equity Fund, Ruilian Private Equity Fund, Wellington Universal Private Equity Fund and other institutions have successively registered with the Asset Management Association of China as foreign private equity fund managers.So far, the total number of foreign private equity firms in my country has expanded to 43.
According to industry insiders, the Chinese asset management market has become one of the largest and fastest growing markets in the world, and more and more foreign institutions are seeking opportunities to deploy in the Chinese market.Recently, a number of foreign institutions have released investment outlooks for the second half of 2022, and most of them are optimistic and bullish on the Chinese stock market.
The latest research report released by Goldman Sachs predicts that in the context of the U.S. economy falling into recession, emerging markets may decline by 8% to 15%.But the MSCI China index could get a boost on the back of improved macroeconomic indicators, which is an excellent opportunity for investors."Driven by a variety of fundamental factors, China's economy is expected to recover further this year, while liquidity remains reasonably ample. We continue to be optimistic about the medium and long-term prospects of China's stock market." said Jiang Zhenghao, equity investment manager of Baring China.
According to the observation of the Chinese CEO of a foreign-funded institution, some companies that have obtained private equity licenses are still continuing to expand their business scope, such as applying for "private to public" and entering the public offering market.In addition, although many foreign-funded institutions have not yet applied for a foreign-funded private equity license, they have set up research companies in China. The positioning of such companies is to first understand the market and customers, and then apply for a foreign-funded private equity when they are ready.
At present, BlackRock, Fidelity and Lubrizol have taken the lead in obtaining approval to establish public fund management companies, while international asset management giants such as Schroders, AllianceBernstein, and Vanda are lining up to apply for public offering licenses.
Fundraising is a big problem
After entering the Chinese market, "difficulty in raising funds" has always been one of the main problems faced by foreign private equity.
The latest data provided by PE Pai Pai.com shows that only Bridgewater (China)'s investment in foreign private equity has exceeded 10 billion yuan.Yuansheng Investment ranked second, with a management scale of between 5 billion and 10 billion yuan.
In addition, the management scale of Runhui Investment, UBS Investment, Deshao Investment and Tengsheng Investment is between RMB 2 billion and RMB 5 billion; the management scale of Value Partners Investment and Man (Shanghai) Investment is between RMB 1 billion and RMB 20 billion. Between 100 million yuan; the remaining foreign private equity management scale is less than 500 million yuan.
An industry insider said that there are two main reasons for the slow expansion of foreign private equity: First, foreign private equity is fully aware of the differences in the regulatory environment and transaction rules between the Chinese capital market and the international capital market, so they are more cautious in the early stage of entry. .Second, as a "foreign monk", foreign private equity attaches great importance to its reputation among local investors, and does not want any risks and negative impacts in the initial stage, so it is extremely cautious when deploying.I hope to fully learn the differences in the Chinese market, gradually adapt to the regulatory environment and policies, and lay a stable foundation for future long-term development.
At present, the concentration of foreign private equity market is very high, and the head effect is obvious.According to the development experience of mature markets, as long as the product is good enough and the reputation can be maintained for a long time, its growth is only a matter of time.
Actively adjust strategies to adapt to the local market
In order to better adapt to the Chinese market, many foreign private equity firms are constantly adjusting their strategic plans or investment strategies.
It is reported that when foreign capital enters the Chinese market, it will formulate corresponding strategies according to its own strengths and weaknesses. Some companies with strong foundations will be more aggressive, while some companies will first set up a branch and then try to move forward.Faced with such a large market, foreign institutions hope to find the best strategy that can not only meet the needs of the local market, but also maintain their original advantages in overseas markets.
A person in charge of a wholly foreign-owned private equity firm revealed that a major challenge for overseas asset management institutions to enter the Chinese market is whether they can quickly build a localized investment management team.For a long time, the localized investment management team that large overseas asset management institutions hope to set up must not only be familiar with the investment strategy and risk control concept of the parent company, but also have rich experience in Chinese stock market and bond market investment, and have the ability to build a team that meets the needs of overseas investment. The scientific investment decision-making process and risk control model required by regulatory agencies.
In recent years, the relatively high alpha returns of the A-share market have attracted the attention of global quantitative senior "players". More and more foreign quantitative giants have entered the Chinese market, but the primary problem they face is how to effectively integrate overseas models." transplant" into the Chinese market.
Xu Zhongxiang, founder and chief investment officer of Ruilian, said that overseas models can only be effective in the A-share market after localized transformation."Overseas models in the A-share market will inevitably experience a period of incompatibility, so we spent 3 years retaining the valuable content in the model and making some new changes. I believe that many foreign capitals are entering the A-share market. This process will also be experienced after the market.”
