Chinese private funds rise 28% in 10 months to $1.63tn
China's private fund industry is rocketing, rising 28% over the first 10 months of this year to CNY10.77tn ($1.63tn), according to the Asset Management Association of China. The surge is due to growing numbers of wealthy individuals who are increasingly turning to money managers. Those with at least $1.5m to invest have multiplied by over eight times within the past 10 years to 1.6 million.

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China's private fund industry is growing rapidly as the country's wealthy increasingly turn toward money managers. Assets under management of Chinese private funds rose 28 percent over the first 10 months of the year, to 10.77 trillion yuan ($1.63 trillion), according to a Nov. 10 report, the latest, from the Asset Management Association of China. The funds target high-net-worth individuals, a group that has grown rapidly in China. The number of Chinese with at least 10 million yuan (roughly $1.5 million) in investible assets has multiplied more than eight times within a decade, to 1.6 million in 2016, according to Bain's report on China Private Wealth, released in August.

"Collectively, China's HNWIs have about RMB 49 trillion (about $7 trillion) in investable assets, and they have grown more discerning about how, and with whom, they invest that money," the report said. The first generation to benefit from China's capitalist turn have tended to manage their money independently. In contrast, "newer HNWIs — who often include the sons and daughters of first-generation company founders — are more willing to seek professional advice." As investors recover from the shock of China's 2015 market crash, the number of private Chinese funds has grown nearly 20 percent this year, to 21,628, according to the Asset Management Association of China. About 8,000 of those fall into the "hedge fund" category of investing in securities, according to local consultancy Z-Ben Advisors. "There is increased interest, increased opportunity," said Chantal Grinderslev, senior advisor and director of operations at Z-Ben Advisors. "If anything it's the secret blessing of the block on outflows. It's really spurring interest onshore from investments onshore. " When it comes to the kinds of funds China's wealthy are pursuing, private equity and venture capital funds have seen much of the growth in the last year, Grinderslev said. According to Z-Ben, assets under management for securities-focused Chinese private funds has fallen from nearly $400 billion at the end of last year to $340 billion this fall. China's hedge fund industry also remains small by global standards. Global hedge fund research firm Preqin only tracks 117 "pure hedge funds" based in China.

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