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China Hedge,
a leading hedge fund media &
research advisory firm in China,
classified and summarized the
important events which occurred in
the Greater China over the past
year. China Hedge is now inviting
global fund managers,
Greater China hedge fund managers,
China domestic private investment
fund managers, mutual fund
managers, private bankers,
professionals from hedge fund
services companies and providers,
government officials, financial
and hedge fund media, and readers
to select the top 10 events in the
Greater China Hedge Fund Industry
happened last year. Out of the
29
Events, the final “2008 Top 10
Greater China Hedge Fund Events”
will be named accordingly by poll
ranking. The final result will be
a comprehensive industry review
for the overall development of
hedge fund industry in China in
2008.
*****POLL RANKING NOW*****
Candidate events for “2008 Top 10
Greater China Hedge Fund Events”(Ranking
not shown in particular order):
1.
CIC appointed professionals to
handle hedge funds and alternative
investments
China Investment Corporation
announced it had appointed some
professionals to handle its
alternative investments. Flelix
Chee, former chairman of Toronto
Asset Management, will be an
advisor for hedge fund selection.
Before the employment of Chee, CIC
had appointed one global asset
consultant in mid-2008 to select
hedge funds including direct
managers and FOFs. Zhou Yuan,
former head of China investment
banking with UBS AG, will be head
of alternative investments in CIC,
covering private equity, real
estate and direct investment
business. Collin Lau, former
Managing Director of Starr
International, will be head of
real estate investments. Sources
indicated that due to the global
financial crisis, the selection of
hedge funds has been postponed.
2.
Several Greater China hedge funds
went bust and locked up
APAC Greater China fund had
dropped 16% from 55 million USD at
the start of this year to 10
million USD in August.
Switzerland’s 788 China fund has
recorded a loss of 95% of its
value for the first 10 months of
last year. $4.5 billion Atlantis
Investment’s China Fortune fund
had blocked redemptions. Some
hedge funds had to stop
disclosures at the third-party
database providers to avoid more
redemption. They include Vision
Gain China fund, Goldbond China
Growth fund, Jayhawk China Fund
(Cayman) Ltd, Qinhan China fund,
Telligent Greater China fund.
3.
Global hedge funds cut HK operations
Several global hedge funds,
including Ramius, GSA Capital and
NewSmith Capital Partners, had
closed their operations in Hong Kong.
Redbrick Capital Management (Asia)
Limited also said it would emerge
the business in Singapore and
Tokyo, and shut down Hong Kong office. Och-Ziff Capital Management layoff
over than ten employees and closed
its Hong Kong office. Citadel shut
down Tokyo office and layoff 25
employees in Hong Kong.
4.
Global hedge funds opened office
in HK, Beijing and other 2-tier
Chinese cities
Aspect Capital Asia
and FOFs such as FRM HK Ltd, Ivy
Asst Mgmt HK, ABS Investment Mgmt
and N1 Asset Mgmt opened their Hong Kong
office aiming at Asia investment
and marketing activities including
mainland China. Global hedge funds
which also opened Hong Kong offices
included AM Investment Partners, Apus Investment, Bucephalus
Capital Management Advisors, and
Millennium Capital Management.
Blackstone, Partners Group and
Blue Oak Capital opened their
Beijing offices focusing on
private equities business. US
hedge fund manager Chilton
Investment Company established its Chengdu presence after Hong Kong
and Beijing office to explore
investment opportunities in
Western China.
5.
Global hedge fund haunted by
investments deals in China
With Hong Kong capital markets all
but shut, forcing billions of
dollars worth of IPOs to be
shelved, many hedge funds are
sitting on illiquid and often
hard-to-price pre-IPO investments
that in some cases could end up
worthless. Among the firms that
actively took part in pre-IPO
financing of mainland companies
were DKR Oasis, Abax Global
Capital as well as US hedge fund
giants such as Stark Capital, Och-Ziff
Capital Management Group LLC, and
Citadel Investment Group LLC.
6.
US hedge fund giants in talks with
Central government in Tianjin
Managed Funds Association and CME
sponsored a workshop in Tianjin,
Alternative Investment in Global
Market, for Chinese government officials,
regulators, CIC and industry
experts. Hedge fund managers who
joined the event included Citadel
Investment Group, Fairfield
Greenwich Group, Harbinger Capital
Partners, Moore Capital Management
LLC, Tudor Investment Group, DE
Shaw Group, Paulson & Co and SAC
Capital Advisors.
7.
Tough year for Chinese local hedge
funds
According to local media, in the
first half of the year, 111
Chinese local hedge funds had
dropped 25.99% on average. Only
three funds gained positive
returns. At November, only 4 new
funds launched compared to more
than 10 in the past. Faced with
tough environment, Pureheart Asset
Management managed by Zhao Danyang,
even liquidated his 5 local funds
in the beginning of the year due
to underperformance with the
peers. Hengpin Trust closed three
structured products including
Shiche Value Growth I, Shiche
Value Growth III, and Xincao
Selection Growth. Shanxi Trust
also closed 60 million yuan
Harvest Yinbao.
8.
Domestic hedge fund launched new
strategies
Huabao-Lishi I, a local hedge fund
product with event driven and
stock futures (pending) arbitrage
was launched this year. BOC
Private Bank joined Beijing-based
Founder Asset Management to launch
an “arbitrage + IPO” product.
SZITIC-Tianli, a timing and
volatility driven trading fund
product was also launched.
9.
CBRC forbidden FX margin trading
business
After two years in operation, FX
margin trading business was
forbidden by China Banking
Regulation Commission. About 4/5
of the FX margin trading market
was executed by foreign brokers or
agents.
10.
Shanghai’s hedge fund street,
Mingsheng Road
Mingsheng Road had been a hedge
fund street in Shanghai. Some
famous local hedge fund mangers,
including Zhenda Investment,
Congrong Capital, Shangya
Investment, Greenwood Asset
Management, Eastern Bay Asset
Management, Huili Investment, and
Pinpoint Capital, all have be
residents on the road.
11.
HK SFC tracked small hedge fund
managers
Hong Kong Securities and Futures
Commission (SFC) had done a survey
on eight hedge fund managers in
October. SFC said some hedge fund
managers provided inaccurate
information to investors in
newsletters and monthly fact
sheets.
12.
China began margin trading and
short selling test
CSRC said domestic securities
firms were allowed to apply for
the test qualifications for margin
trading since the start of
December last year. The exact
timetable and the list of
approved securities houses have not been
released yet.
13.
SAC Capital star trader opened
hedge fund in Shanghai
Jiang Pin, a former star trader in
SAC Capital Advisors and Lehman
Brothers, established his own
hedge fund management company,
Yilong Investment in Shanghai. He
will launch a local
securities investment trust
product with Citic Trust investing
in local equities and bond market
after Lunar New Year.
14.
Chinese hedge fund manager to set
up quant fund overseas
Bohong Fund Management, a
quantitative hedge fund manager
established in 2003 in Shanghai
had launch a new offshore hedge
fund, Bohong China Arbitrage fund
in Hong Kong, to invest Hong Kong
and global markets. With
international management team, the
firm have the track record to
manage onshore money to specialize
on quantitative strategies of ETF
arbitrage, share reform arbitrage
and event driven strategies.
15.
Greater China hedge fund manager
rankings crashed
Last year two Greater China hedge
fund managers ranked top 25 in
Asia Biggest Hedge Funds by AUM.
Expert predicts this year only
Value Partners may be still in top
25 and Prime Capital Management
may be out. Overall size of Greater China
hedge funds should be drastically
reduced due to poor performance on
Hong Kong and China market and
large redemption from investors.
16.
BOC acquired Swiss hedge fund
manager
Bank of China paid 9 million Swiss
francs for a 30 percent stake in
Geneva-based Heritage Fund
Management SA to tap international
private banking opportunities. The
fund houses is now named BOC
(Swiss) Fund Management Ltd. 788
China fund, Heritage’s flagship
fund has recorded a loss of 95% of
its value for the first 10 months
of the year.
17.
Independent institutions released
China hedge fund rating and
scoring system
Sinolink Securities, 21 Century
Business Herald, CBN Research,
Shanghai Securities News and
Morningstar Inc announced their
own rating, evaluation and
database system this year to track
the performance on local Chinese
hedge funds
18.
Nanning Sugar sues Martin Curries
over trading dispute
The UK-based firm Martin Currie
Ltd and its two wholly-owned
subsidiaries were brought to court
by A share-listed Nanning Sugar
manufacturing Co Ltd because of a
share-trading dispute. Under
Chinese Securities Laws, any
earnings from the sale of a
company's shares exceeding 5
percent of its total equity within
six months belonged to the company
-- in this case, the gains should
be delivered to Nanning Sugar. The
suit was China’s first court case
involving a qualified foreign
institutional investor under the
QFII scheme. One local media
pointed out that the client behind
Martin Currie in fact was George
Soros.
19.
Chinese hedge fund manager won
launch with Warren Buffet
Zhao Danyang, general manager and
CIO of Pure Heart Asset
Management, won the annual launch
with Warren Buffet in an annual
auction with 2.11 million USD.
Zhao launched Pure Heart China
Growth Fund in Hong Kong in 2002,
and a series of local securities
investment trust product with
Shenzhen International Trust &
Investment Company. At the
beginning of the year, he
liquidated his five local hedge
fund products due to poor
performance compared to the peers
and lack of investment
opportunities in the foreseeable
future.
20. CLSA involved in 5 billion HKD
warrant corruption
Several senior executives in
brokerage firm CLSA used special
accounts to make money from
warrant trading business within
the company.
21.
HK-based Value Partners handed
with Ping An to launch local hedge
funds
HK-listed hedge fund manager Value
Partners joined Ping An Trust to
launch four securities investment
trust products, which were issued
for local Chinese investors,
totaling about 1.35 billion yuan,
to invest in A share market. Ping
An Insurance is the biggest
institutional shareholder of Value
Partners since the IPO of the
latter.
22.
Global Commodities Hedge Fund
actively explore the business and
local commodity trading in China
Hedge fund manager Red Kite said
it would establish a joint venture
with China Maike. The JV, HFZ
Capital Management Ltd will manage
a new fund, Red Kite China to
invest in Asia including China
commodities market. US-based hedge
fund manager, Dunheath Capital
Partners planned to launch a fund
to trade domestic metals and other
commodities in China. The fund,
named DCP Global Fund, could be
the first hedge fund registered in
mainland China.
23.
HK strengthened China futures
business
Newly established Hong Kong
Commodities Exchange announced it
had launched gold futures and oil
business and studied a number of
new products including soybean and
iron ore. The Chinese rivals are
facing strong competitions from
Hong Kong.
24.
Chinese mutual fund manger to open
Hong Kong unit and target hedge
funds
After the cooperation between
Bosera Fund Management and US
hedge fund manger Stark
Investments, China Southern Fund
Management established a joint
venture with Hong Kong-based Orient
Patron Asset Management. CSOP
planned to launch hedge funds,
FOFs and PE for domestic investors
in the future. Now domestic fund
houses, including Harvest, E Fund
and ChinaAMC also have asset
management licenses in Hong Kong.
However, due to current volatile
environment, sources inidicated
that CSRC has postponed
further approval for Chinese fund
companies to open Hong Kong
office. Approval for QDII products
has also been postponed.
25.
QFII may be allowed to invest
commodities futures
Shanghai Futures Exchange planned
to open the commodities futures
scheme to overseas investors. As
the turmoil in the market, there
was no schedule on that plan.
Global futures institutions with
strong influence on global pricing
hadn’t found a way to invest in
China market under the current
regulation.
26.
Global hedge funds invested
domestic companies
Elliott & Associates injected 175
million yuan in Shanghai-listed
Kunming Sinobright and purchased
34.7% shares to become the biggest
shareholder. JANA Partners joined
with Sandell Asset Management and
Spark Capital to acquire CNET.
However, JANA Partners failed on
the deal with Shenyang Machine
Tool Co Ltd after more than one
year’s negotiation.
27.
Huge forex and futures loss for
local Chinese corporates
After Citic Pacific, other two
Chinese companies, including China
Railway Group and China Railway
Construction Group reported that
they recorded millions of dollars
in losses in forex trading. It is
reported that at least 27 Hong
Kong-listed enterprises suffered
loss on financial derivatives and
forex deposits.
28.
Jim Rogers had or not bought
A-shares?
Jim Rogers said he hadn’t ever
bought any A-share stocks in an
investment strategy forum held by
a Chinese securities firm. Rogers
said H- , B-, and S- shares were
all cheaper than A-shares, thus
there is no reason to buy A
shares. Chinese investors would
like to know why Rogers said China
equities market was bullish but
even didn’t hold any local stocks.
29.
First hedge fund products appeared
in China private banking
wealth management
Bank of China Private Bank
(Beijing) had launched a new
wealth management product named
"arbitrage + IPO" aggregate money
trust plan.
Beijing-based Founder Asset
Management will act as investment
manager of the aggregate trust
plan. China International Eco &
Trade Trust is the trustee. BOC
Private Bank is the administrator
and marketing manager.
The product mainly invests in
local ETFs, as well as IPO shares.
The target annualized return will
be 6.5%-10%.
*****POLL RANKING NOW*****
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