Hywin Capital Management, based in Shanghai, has launched a new, multi-manager hedge fund that is targeting 8% to 15% annual returns with minimal drawdowns, according to Gib Dunham, managing director and the portfolio manager of the fund.
The quantitative fund will allocate assets to four primary sectors, including relative value, private credit, quantitative, and zero correlation, Dunham said.
He added that the focus of the fund is to combine managers with the proven ability to generate excess returns over benchmark indices, manage drawdowns, and provide returns that are uncorrelated with the broad industry benchmarks.
Zhu Shuming, president of Hywin Capital, said China’s hedge fund industry is still growing and not many Chinese investors are familiar with alternative investment strategies.
“Probably more than 90% of Chinese investors’ portfolios are in real estate. In fact, we bring the concept of investment portfolio to our investors to diversify risks and gain returns,” said Zhu.
The first hedge funds in China were recognized legally in 2013. Since then, expansion has been slow due to China’s nascent financial services infrastructure. Still, the Asset Management Association of China said there are more than 27,000 hedge funds registered in China as of 4Q 2016.
Zhu said Hywin Financial Holding Group, Hywin Capital’s parent company, has established multiple overseas offices to introduce a variety of investment vehicles to wealthy Chinese investors and help diversify their portfolios.
“The launch of this multi-manager product is significant to our Chinese investors because it’s an asset class most of them don’t have access to,” said Dunham.
Hywin Financial Holding Group is a multi-national conglomerate with more than 5,000 employees worldwide and approximately $15 billion in assets under management.
Founded in 1989, the company has expertise across multiple asset classes, including hedge funds, real estate, insurance, asset management, private equity, and lending.