Six foreign hedge fund management companies have been granted permission by Shanghai to raise Yuan funds in China and invest it abroad, the 21st Century Business Herald reported.

The move opens up the world’s second-largest economy for the first time to the US$2 trillion-plus global hedge fund industry, potentially helping foreign funds raise billions of dollars from Chinese institutional investors for investment abroad.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The move is likely to direct a capital outflow worth a combined US$3 billion, the publication reported citing an unidentified source with knowledge of the decision.

According to the report the groups are Man Group, Winton Capital Management, Oak Tree, Citadel, Och-Ziff Capital Management Group and Canyon Partners.

The city, which is aiming to transform itself into a global financial centre by 2020, officially embarked on a long-awaited qualified domestic limited partner (QDLP) scheme after obtaining approval from state regulators.

The qualified foreign institutional investor (QFII) and the renminbi qualified foreign institutional investor (RQFII) programmes give quotas for foreign institutions to invest in China’s markets, while the qualified domestic institutional investor (QDII) scheme gives local institutions quotas to invest outside of China in equities and fixed income products.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The State Administration of Foreign Exchange set an initial total US$5 billion quota for the Shanghai QDLP pilot programme and it is believed the city hopes to see this quota increased.

The overall quota for a program allowing foreign institutions to invest in China’s markets was recently raised to US$150 billion, up from the previous US$80 billion.